The U.S. Department of Justice (DOJ) announced a settlement of up to $100 million with Independent Health, a Medicare Advantage (MA) plan serving upstate New York, and Betsy Gaffney, the former Founder and CEO of DxID, a now-defunct vendor that provided chart review services to MA plans, including Independent Health.
As with so many False Claims Act lawsuits, the case was launched by a whistleblower named Teresa Ross, a former Director of Risk Adjustment at Group Health Cooperative, an MA plan in Seattle who also retained the services of vendor DxID and Ms. Gaffney.
The case is remarkable in several ways. It’s the largest-ever Part C settlement with a health plan purely based on a whistleblower case. It is also one of the first, if not the first, settlement with a vendor for allegations of risk adjustment fraud — and notably includes an individual executive at the vendor, Gaffney, who agreed to pay $2 million to resolve the allegations against her. Such DOJ resolutions with individual executives are key for deterrence. The case also lasted 12 years, an unusually long time – and a fact I know intimately, having had the great pleasure of representing Ms. Ross. Ms. Ross, who wore a wire to support the Government’s investigation, will receive 22.5 percent of the settlement amount, or up to $22.5 million, as her whistleblower share.
Around eight years into the case, DOJ settled with Ms. Ross’s former employer, Group Health Cooperative, for $6.4 million. The thread connecting...
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