It is not only health care physicians, hospitals, medical groups, laboratories and other companies that can get sued in qui tam cases. Recently a California-based independent physician association reached a settlement in a false claims act with the government.
The settlement came after a voluntary disclosure. While the voluntary disclosure is expensive, in the long run it is much more effective and helps ensure that the provider will not be excluded from Medicare. This settlement also resolves a whistleblower lawsuit. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
HealthCare Partners Holdings LLC, doing business as DaVita
Medical Holdings LLC, agreed to pay $270 million to resolve its False
Claims Act liability for providing inaccurate information that caused Medicare
Advantage Plans to receive inflated Medicare payments. DaVita is headquartered in El Segundo, California.
Under Medicare Advantage, also known as the Medicare Part C program, Medicare
beneficiaries have the option of enrolling in and obtaining health care from
Medicare Advantage Plans (MA Plans) that are owned and operated by private
Medicare Advantage Organizations (MAOs).
Unlike traditional Medicare, where
payments to health providers are based on the services they render to the
patient, MA Plans are paid a fixed, monthly amount to provide health care to
beneficiaries who enroll in their plans. To accommodate costs that may be
associated with patients that require more care than an average patient,
Medicare payments to MA plans are “risk adjusted” to reflect, in significant
part, the health status of the beneficiary. The result is that MAO plans
receive higher payments for patients who are diagnosed with conditions that
require greater care.
To provide the patient care, MAOs may contract directly with physicians and
other healthcare providers, or they may contract with Medical Services
Organizations (MSOs), which in turn either employ or contract with healthcare
providers. These health care providers then render the patient care and provide
the diagnoses that MAOs submit, in turn, to Medicare to obtain the
risk-adjusted payments from CMS.
DaVita operated an MSO and contracted with MAOs in various states, including
California, Nevada and Florida, to provide care to the MAOs’ enrolled Medicare
beneficiaries. In connection with the medical services it provided to those
beneficiaries, DaVita collected and submitted diagnoses to the MAOs. As payment
for its services, DaVita received from the MAOs a share of the payments that
the MAOs received from CMS for the beneficiaries under DaVita’s care.
DaVita voluntarily disclosed to the government various practices that were
instituted by HealthCare Partners, a large California-based independent
physician association that DaVita acquired in 2012, that caused MAOs to submit
incorrect diagnosis codes to CMS and obtain inflated payments in which DaVita
and HealthCare Partners shared. For example, HealthCare Partners disseminated
improper medical coding guidance instructing its physicians to use an improper
diagnosis code for a particular spinal condition that yielded increased
reimbursement from CMS.
Based on these self-disclosures, and DaVita’s cooperation with the government’s
subsequent investigation, the United States agreed to a favorable resolution of
potential claims arising from the conduct.
The settlement also resolves allegations made by a whistleblower that
HealthCare Partners engaged in “one-way” chart reviews in which it scoured its
patients’ medical records for diagnoses its providers may have failed to
record. It then submitted these “missed” diagnoses to MAOs to be used by them
in obtaining increased Medicare payments. At the same time, it ignored
inaccurate diagnosis codes that should have been deleted and that would have
decreased Medicare reimbursement or required the MAOs to repay money to
Medicare.
The allegations of “one-way” chart reviews were brought in a lawsuit under
the qui tam, or whistleblower, provisions of the Federal False Claims Act.
This statute permits private parties to sue on behalf of the government for
false claims and to receive a share of any recovery. The whistleblower in this
action is James Swoben, who was a former employee of an MAO that did business
with DaVita. Mr. Swoben will receive $10,199,100 for the settlement of the
“one-way” allegations. The case is captioned United States ex rel. Swoben
v. Secure Horizons, et al., CV09-5013 (C.D. Cal.).
The corporate affiliates related to Health Care Partners and which are part of this settlement are DaVita Medical Group Nevada (Coats), Ltd; DaVita Medical
Group California, P.C.; DaVita Medical Group Associates California, Inc.;
HealthCare Partners Affiliates Medical Group and its subsidiary medical groups;
DaVita Medical Group ARTA Health Network California, P.C.; and DaVita Medical
Group ARTA Western California, Inc.
