Dive Brief:

• Complete Health, a value-based primary care provider in three states, has agreed to pay $14.1 million to settle accusations that it overcharged Medicare, the latest instance of a company dinged for allegedly gaming Medicare Advantage in order to profit.
• The settlement announced by the Department of Justice on Monday puts to rest a whistleblower lawsuit that said Complete submitted false diagnosis codes for its senior patients to increase its reimbursement in the privatized Medicare program from 2020 to 2023.
• The DOJ said the settlement shows regulators’ commitment to combating profiteering in MA, a hot-button issue as the program expands to more Medicare seniors and gobbles up more taxpayer dollars.

Dive Insight:

In MA, the government pays insurers a fixed payment per member each month that’s adjusted higher or lower based on the health needs of their enrollees. The CMS calculates this adjustment based on seniors’ medical diagnoses, with a more severe diagnosis or more expensive treatment boosting a member’s risk score — and the corresponding reimbursement for their insurer.

That creates an incentive for MA organizations to exaggerate their members’ health needs to inflate their revenue, a practice called upcoding. It’s a big problem, especially as Medicare buckles under sustained financial stress: Upcoding is expected to drive $22 billion in additional MA spending compared to traditional Medicare this year, according to congressional advisory group MedPAC.

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