In the largest Medicare Advantage fraud settlement to date, Kaiser Permanente has agreed to pay $556 million to settle Justice Department allegations that it billed the government for medical conditions patients didn’t have.
The settlement, announced Jan. 14, resolves whistleblower lawsuits that accused the giant health insurer of mounting a years-long scheme in which it overstated how sick patients were to illegally boost revenues.
“Medicare Advantage is a vital program that must serve patients’ needs, not corporate profits,” said U.S. Attorney Craig Missakian for the Northern District of California, in announcing the settlement.
“Fraud on Medicare costs the public billions annually, so when a health plan knowingly submits false information to obtain higher payments, everyone — from beneficiaries to taxpayers — loses,” he said.
Medicare Advantage plans offer seniors a private alternative to original Medicare. The insurance plans have grown dramatically in recent years and now enroll about 34 million members, more than half of the people eligible for Medicare. About 2 million Medicare members are enrolled in KP plans.
Attorney Max Voldman, who represents whistleblower James Taylor, said the case shows the need for a “continued effort to fight fraud in health care.”
“It’s important to send a signal to the industry, and this number hopefully does that,” he said.
Taylor, a longtime Kaiser Permanente physician, filed his suit against the company in October 2014.
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