The Department of Justice announced affiliates of Kaiser Permanente, a healthcare consortium in Oakland, California, have agreed to pay $556 million to resolve allegations False Claims Act violations. The healthcare affiliates allegedly submitted invalid diagnosis codes for their Medicare Advantage Plan enrollees to obtain higher government reimbursements.
The civil settlement resolves claims brought forward by qui tam whistleblowers Ronda Osinek and James M. Taylor, M.D., former employees of Kaiser, who are entitled to an award of $95 million. Under the qui tam or whistleblower provisions of the False Claims Act, private parties are permitted to bring forward a lawsuit on behalf of the United States and receive a portion of the recovery.
“Medicare Advantage is a vital program that must serve patients’ needs, not corporate profits,” said U.S. Attorney Craig H. Missakian for the Northern District of California. “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. We have an obligation to protect the American taxpayer from waste, fraud, and abuse, and we will relentlessly pursue individuals and organizations that compromise the integrity of the Medicare program.”
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