Introduction
The U.S. Department of Justice (DOJ) recently announced a rare criminal indictment involving the Medicare Advantage program—a contrast from DOJ’s more typical use of its civil enforcement authority to pursue similar issues under the False Claims Act. The indictment alleges that from 2015 to 2020 a former employee of a Florida company that administers Medicare Advantage plans falsified, and caused others to falsify, diagnoses that were submitted to the Centers for Medicare and Medicaid Services (CMS) and that resulted in millions of dollars in overpayments. This indictment comes as the DOJ has pledged to increase investigations related to fraud involving Medicare Advantage plans. Notably, consistent with the DOJ’s recent pronouncements regarding self-disclosure, cooperation, and remediation, the DOJ declined to prosecute the former employee’s company, HealthSun Health Plans, Inc. (“HealthSun”).
Medicare Advantage
The alleged fraud in this case concerns false information that was the basis for payment to HealthSun’s Medicare Advantage plans. The Medicare Advantage program (also known as Medicare Part C) allows seniors to receive their Medicare benefits by enrolling in private health care plans. In exchange for managing these beneficiaries’ care, CMS prospectively pays plans a monthly amount for each enrollee. These monthly per-member payments to each plan are adjusted based on its enrollees’ age, gender, and health status—a process known as “risk adjustment.” To...
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