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Upcoding Decoded: Whistleblower Receives $3.8 Million for Reporting Medicare Advantage Fraud

August 22, 2023.  The United States Department of Justice settled a case against a Medicare Advantage Organization (MAO) where the private health insurance organization allegedly added unsupported diagnosis codes to beneficiaries’ charts.  Under the terms of the settlement, Portland, Maine-based Martin’s Point Health Care Inc. (Martin’s Point) paid $22,485,000.  The whistleblower was a former manager in the company’s Risk Adjustment Operations group. Under the qui tam provision of False Claims Act, the whistleblower filed suit on behalf of the U.S. government. For reporting Medicare Advantage fraud, the whistleblower will receive a $3.8 million reward or almost 17% of the settlement.

According to the allegations, Martin’s Point engaged in retrospective chart review for the Medicare beneficiaries subscribed to its Medicare Advantage Plans. The company submitted additional diagnosis codes without proper reconciliation with medical records, garnering higher payments from the Centers for Medicare and Medicaid (CMS) to which they were not actually entitled.

Medicare Advantage Plans (also known as Medicare Part C) are Medicare-approved healthcare plans that provide coverage for hospital, medical, and sometimes prescription drug benefits. These plans are administered by private insurers and are available to people eligible for Medicare (those who are 65 years of age or older). Healthcare providers are paid for Medicare Part C on a capitated basis, that is, a fixed amount per patient. If a patient has a higher “risk score,” the capitated payments to providers are adjusted for the severity of the patient’s diagnoses. The fraud scheme in this case involved the MAO “upcoding” beneficiaries’ diagnoses to get higher risk adjust payments for each beneficiary. According to the settlement agreement, the MAO’s chart review program picked from ten diagnosis codes to add to beneficiaries’ charts, without a physician’s sign-off.

The False Claims Act is one of the most important tools the government has to fight fraud in government programs. When healthcare providers submit claims that are intentionally false, they risk not only being charged with violations of the law but lose public trust. One of the reasons the government polices health care fraud as a top priority is that it impacts millions of Americans directly. Additionally, any misuse of CMS funds amounts to an economic injury to the United States, thereby affecting everyone. The Deputy Inspector General for Investigations at the Department of Health and Human Services, Office of Inspector General (HHS-OIG) said about the case, ““It is a privilege for health plans to provide services to Medicare beneficiaries, not a right. Medicare Advantage Plan sponsors that submit inaccurate claim information in order to justify inflated payments undermine the financial integrity of the program.”

If you would like to report Medicare fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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