WHAT IS MEDICARE RISK ADJUSTMENT?

Risk adjustment is a method used to offset the cost of providing health insurance for individuals—such as those with chronic health conditions—who represent a high risk to insurers. With risk adjustment, an insurer receives compensation to make up for extra costs associated with high-risk individuals.

The Medicare Advantage program uses risk adjustment to maintain payments to Medicare Advantage that provide benefits to policyholders. A Medicare Advantage Plan receives a fixed monthly amount per policyholder to cover the expected cost of care for that patient. The monthly amount is based on demographic and health information, and the government pays more for policyholders who are expected to incur a higher healthcare cost—i.e. risk adjustment.

This system of flat rates is meant to encourage preventative healthcare so that the Medicare Advantage Plans can avoid covering higher-cost care and increasing profits while also promoting patient health. However, because Medicare Advantage Plans receive more government funds when their patients have higher costs, this system provides Medicare Advantage Plans with the opportunity to engage in Medicare advantage risk adjustment fraud.

Medicare advantage risk adjustment fraud occurs when Medicare Advantage Plans engage in fraudulent activities to make patients appear in worse health than they actually are, inflating monthly payments that the company receives per policyholder. It is difficult for the government to detect this type of medical fraud, which is why our country relies on whistleblowers to come forward and report these illegal activities.

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WHAT IS MEDICARE RISK ADJUSTMENT FRAUD?

To determine health status, risk adjustment relies on accurate documentation of diagnoses and treatments made by providers. Medicare Advantage Plans may engage in a variety of illegal and fraudulent conduct to inflate the set monthly amount they receive per policyholder. The end game of this conduct is to make patients appear in worse health than they are.

Medicare risk adjustment fraud can take many forms. Common forms include:

  • Upcoding: Medicare Advantage Plans will use billing codes to reflect a higher level of services performed, or more serious diagnoses, than the patient actually received. This form of Medicare advantage billing fraud can also encompass the practice of claiming current treatment of a condition that was already accounted for.
  • Chart Mining: A Medicare Advantage Plan or a third party is hired to change patient charts after they are created in order to upcode The goal is to make it appear as though the patient’s health is worse than it is—and, therefore, the care more expensive. This can also include chart reviews that only try to upcode and do not fix incorrectly coded conditions and treatments that would decrease the risk adjustment score.
  • Misdiagnosing: Physicians and other healthcare providers are encouraged to upcode so that the malpractice does not reflect on direct employees of the Medicare Advantage Plan. This can be accomplished by training or incentivizing providers to more seriously diagnose patients.
  • Unapproved claims: This occurs when claims are submitted that are not allowed under Medicare because of the service or provider type.
  • Incentivizing: Coders are trained, encouraged or incentivized to input diagnoses not provided by doctors based on other chart information like test results or medications.
  • Purposeful Oversight: Failing to establish or maintain adequate compliance procedures to detect upcoding, adhere to CMS requirements and remove false claims is known as purposeful oversight.
  • Improper Reporting: This occurs when an internal audit is run and fails to disclose erroneous diagnoses or other problems to Medicare. Failing to filter data properly, resulting in ineligible claim submissions, is also improper reporting.

These types of Medicare Fraud are performed in secret and are difficult to detect through government inspection. Employees or other witnesses who have knowledge of illegal practices have the ability to stop Medicare risk adjustment fraud.

WHISTLEBLOWER PROTECTION AND BENEFITS

Medicare Advantage Plans that work with Medicare do so in agreement with the federal government, which makes them government contractors. Like most government contractors, Medicare Advantage Plans are subject to the False Claims Act (FCA). The FCA makes it illegal for government contractors to knowingly submit false claims for payment to the federal government. When a Medicare Advantage Plan engages in Medicare risk adjustment fraud and makes a claim for payment from the government, it has violated the FCA.

The FCA also includes what are sometimes called qui tam provisions. These provisions allow those with knowledge of fraudulent claims for payment to sue on behalf of the government—also known as a whistleblower. When a whistleblower files an FCA complaint they do so under seal, making the case confidential. The FCA provides employment protection for whistleblowers, so they are safe from termination or discipline for Medicare advantage fraud reporting.

In addition to these protections, the FCA also provides rewards to the whistleblower in the event of a successful government recovery. Whistleblowers in FCA cases are entitled to 10% to 30% of the government recovery. The settlements for Medicare advantage fraud can be significant. Recent settlements in the risk adjustment fraud area have ranged between $16 million to $22 million.

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WHISTLEBLOWER ATTORNEYS

FCA cases involve a complex interaction between civil attorneys and the Department of Justice. This dynamic relationship, along with the difficult process of drafting FCA complaints and complying with the myriad procedural rules of the FCA, make these cases some of the most legally complicated in our civil justice system. The intricacy of FCA cases makes having an experienced and knowledgeable advocate particularly important. Well-intended whistleblowers seeking to slow corruption and Medicare advantage plan fraud in the healthcare system can be vulnerable to personal and professional consequences without the guidance of an experienced FCA lawyer.

The attorneys at Price Armstrong have experience in representing whistleblowers in successful FCA cases. If you have knowledge of Medicare advantage risk adjustment fraud, an attorney at Price Armstrong is available for a no-cost, no-obligation and confidential consultation.

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If you have evidence of Medicare advantage risk adjustment fraud, contact the attorneys at Price Armstrong. We can help you seek justice and protect your rights throughout the process. Call us today at (205) 208-9588 for a free initial consultation and review of your case. Let us fight for you – call now!