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Anthem Inc Faces Lawsuit Alleging $100 Million Medicare Advantage Fraud

Date Published
Dec 06, 2022

Insurance giant Anthem Inc is set to face a whistleblower lawsuit brought on behalf of the US government under the False Claims Act regarding alleged Medicare fraud. The amount of defrauded funds total over $100 million, making the case a substantial one.

Unfortunately, many healthcare providers and insurers seek to take advantage of taxpayer money by submitting false claims to the government for undue reimbursement. Medicare Advantage, or Medicare Part C, is particularly susceptible to fraud because it involves private health insurance. These insurers are paid on a per-capita basis by the government based on the patient’s “risk score.” This payment structure causes some insurers to purposely misdiagnose patients in an attempt to change the risk score.

However, employees of insurance companies and medical facilities can be invaluable as whistleblowers by reporting false claims and other kinds of Medicare fraud. By becoming a whistleblower, you can hold unethical healthcare providers or insurers accountable and reclaim stolen taxpayer money while protecting your own best interests. Speak to the experienced legal team at Tycko & Zavareei LLP today if you have information about fraud involving federal or state money.

Have There Been Similar Medicare Advantage Lawsuits?

The Anthem Inc lawsuit is notable because it involves such a large sum, but it is not the only one of its kind. In recent years, there have been several lawsuits filed against large insurance companies that participate in Medicare Advantage. Other well-known insurers such as Cigna are also currently being sued by the US government for allegedly inflating their Medicare Advantage payouts. The Cigna lawsuit, like the Anthem case, originated from information given by whistleblowers who suspected that these companies were misreporting their data to the government.

What Allegations Does Anthem Face in the $100 Million Medicare Part C Lawsuit?

On October 3rd, 2022, a federal judge ruled that Anthem Inc must face a lawsuit that was filed back in March of 2020. The lawsuit alleges that the company stole millions of taxpayer funds by purposefully not verifying or inflating diagnosis data for their patients. This allowed the insurer to claim higher payouts from Medicare Part C per patient, while the actual costs they spent reimbursing covered care may have been much lower.

According to U.S. District Judge Andrew Carter, based in Manhattan, the amount in question may be over $100 million, which means that the costs involved may be “substantial and not merely administrative.” The period of time under investigation spans from early 2014 to 2018.

Understanding the Alleged Fraud in the Anthem Medicare Advantage Case

Each private insurer that is part of the Medicare Advantage program reports diagnosis data back to the Centers for Medicare and Medicaid Services (CMS). This medical information is used to calculate “risk scores” for patients. Higher risk scores usually correlate with more required medical care, allowing for higher Medicare payments per patient. In order to ensure they were using the correct diagnostic codes, Anthem

In the Anthem Medicare Advantage fraud case, the insurance giant was accused of not resolving diagnostic errors detected by Medi-Connect, an oversight company. Medi-Connect was hired by Anthem Inc to review data reported to Medicare by the company involving their patients’ risk scores and diagnostic codes. When Medi-Connect flagged some of Anthem Inc’s reporting as inaccurate, the company allegedly purposefully disregarded the warnings in order to continue to claim higher payouts.

Sources claim that the company saw the chart review program as a “cash cow” and not as a method to report accurate information to the government. While knowing their information was incorrect, Anthem Inc continued to certify their data to CMS each year, saying that their files were “accurate [according to their] best knowledge, information and belief.”

What is Medicare Part C or Medicare Advantage?

Patients who opt-in to Medicare Advantage, also known as Medicare Part C or MA Plans, can use private insurance companies to receive care and Medicare benefits. These plans are popular, as they usually include prescription drug coverage and put a cap on out-of-pocket costs for patients. Additionally, for patients who have had private insurance companies support them before, there is the added “advantage” of not having to switch covered doctors or providers. Instead, patients are able to keep seeing their existing in-network doctors and still receive coverage from Medicare.

Finally, Medicare Advantage plans often offer extended coverage for services that are usually deemed extra, such as fitness club memberships, vision and/or dental checkups and services, and some additional services for enrolled patients who are chronically ill.

How Does Reimbursement with Medicare Advantage Work?

Under Medicare Advantage, private companies like Anthem Inc or Cigna file insurance claims with Medicare to receive reimbursement for services rendered by their in-network doctors. Money for reimbursement comes from two taxpayer-funded sources:

  1. The Hospital Insurance Trust Fund, which also covers many Original Medicare expenses like nursing care, hospital bills, and hospice fees.
  2. The Supplementary Medical Insurance Trust, which covers costs for Medicare Parts B, D, and more.

Medicare Advantage Fraud

Medicare Advantage fraud has come under scrutiny in recent years. According to oversight organizations, the total amount defrauded by private insurers from the program in recent years may total over $12 billion. “Coding intensity,” or upcoding for services not rendered or rendered at different levels than reported is one of the main sources of fraud.

Meanwhile, enrollment in Medicare Advantage continues to soar, as nearly half of older Americans who receive Medicare have chosen to participate in Medicare Part C, largely due to its extended benefits. Around 28.7 million Americans currently receive care under Medicare Advantage.

If You See it, Stop It: Reporting Medicare Fraud

If you work for a healthcare company or insurance provider, you may be on the front lines of identifying and reporting Medicare Advantage fraud. This large-scale robbery prevents taxpayers who pay into the system from being able to reap the full rewards of their investment. By drawing down Medicare funds, private companies take advantage of a public good meant to provide for older citizens.

Becoming a Medicare Advantage whistleblower can help reduce fraud and hold unscrupulous insurance companies accountable. Whistleblowers are also able to receive government protections against retaliation by their employers. It is prohibited to fire or demote a protected whistleblower, or to threaten or harass them, or reduce their scale of pay or hours.

If you have information like the facts reported in the Anthem case, do not wait. Our team can help determine whether you qualify for a substantial payout and protections under the False Claims Act. Speak to a qualified attorney at Tycko & Zavareei LLP today. The initial consultation is free and confidential.

How can we help you?

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Our experienced qui tam attorneys are available for a confidential, no-cost, no-commitment, initial evaluation of your case. Call us now at (202) 973-0900, or begin the process by completing our Confidential Case Evaluation Form.
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