According to a Dec. 20 news release from the Justice Department, DxID, a subsidiary of Independent Health, retroactively searched medical records for additional diagnoses to boost MA enrollees’ risk scores. DxID, which shut down in 2021, offered its services to other health plans.
The lawsuit was brought by a whistleblower, a former employee of Group Health Cooperative, which paid DxID to assess its MA codes. Group Health is now part of Kaiser Foundation Health Plan of Washington. In 2020, Kaiser agreed to pay $6.4 million to settle allegations it knowingly submitted invalid claims.
The whistleblower, Teresa Ross, will receive at least $8.2 million in the settlement, and Betsey Gaffney, former CEO of DxID, will pay $2 million.
Nearly every major Medicare Advantage plan has been accused of or settled allegations of upcoding, or making patients appear sicker than they are on paper to receive higher reimbursements from the government.
Independent Health will make guaranteed payments of $34.5 million as part of the settlement, according to the Justice Department. The company will make contingent payments of up to $63.5 million, depending on its ability to pay.
In a statement shared with Becker’s, an Independent Health spokesperson said the settlement includes no admission of wrongdoing, and “allows us to avoid the further disruption, expense and uncertainty of litigation in a matter that has lingered for over a decade.”
“This dispute had nothing to do with the quality of care or services our members received, or our payment of member claims,” the company said. “We worked collaboratively with the [Justice Department] to resolve this matter, and we now move forward with our focus remaining on always meeting the healthcare needs of our members.”
Independent Health is a nonprofit insurer based in Buffalo, N.Y.
“Independent Health is dedicated to the integrity of our mission to serve our members with unmatched quality and service while contributing to the health of our communities,” the spokesperson added.
