(L-R)Jeanne Markey and Ray Sarola of Cohen Milstein Sellers & Toll. Courtesy photos
In the six whistleblower lawsuits against Kaiser Permanente consortium members in which the Department of Justice intervened in July 2021, the whistleblowers allege that Kaiser violated the False Claims Act in its operation of Medicare Advantage plans—specifically that Kaiser caused its doctors to create after-the-fact “addenda” to patients’ medical records for the purpose of adding diagnoses that did not comply with Medicare requirements because the patients did not have those diagnoses or the doctor did not address those diagnoses during the patients’ visits.
This enforcement action represents the latest development in the escalating battle between the DOJ and private Medicare Advantage Organizations over those companies’ compliance with the laws and regulations of the Medicare Advantage program. With the federal government’s annual expenditure on Medicare Advantage exceeding $340 billion, the stakes in the battle with private Medicare Advantage Organizations are enormous. DOJ’s intervention also illustrates the common truth tying together the behavior that DOJ is targeting in pursuing MAOs: these organizations have a financial incentive to assign more serious diagnoses to their beneficiaries when they report to CMS. The greater the health risk the patient appears to present, the more federal money the MAO stands to pull in.
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