The U.S. District Court for the Northern District of California determined that the United States’ claims against Kaiser Permanente for submission of inaccurate diagnosis codes via addenda may proceed. Although the court narrowed the scope of claims in the action, it determined that both Kaiser’s Medicare Advantage contract with the Centers for Medicare & Medicaid Services (CMS) and the governing federal regulations required Kaiser’s addenda to comply with the International Classification of Diseases (ICD) coding guidelines.
This case concerns Kaiser’s Medicare Advantage risk-adjustment practices. The government alleges that Kaiser violated the False Claims Act (FCA) by submitting inaccurate diagnosis codes via addenda for its Medicare Advantage Plan enrollees in an effort to increase patients’ risk scores and, as a result, receive higher reimbursements. Kaiser previously filed four motions to dismiss the False Claims Act allegations pending against it and focused on whether sub-regulatory guidance could be used to support a legal falsity claim regarding diagnoses added through addenda.
On Nov. 14, the court answered that question with a resounding yes. The court rejected Kaiser’s arguments regarding legal falsity and permitted the government’s allegations that Kaiser “systematically alter[ed] patient medical records to add diagnoses that . . . were unrelated” to a patient’s visit with a Kaiser physician in an effort to inflate patients’ risk scores...
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