Independence Blue Cross Agrees to Pay $22.5 Million to Resolve Medicare Advantage False Claims Act Allegations

The Department of Justice (DOJ) has announced that Independence Blue Cross (IBX) has agreed to pay $22.5 million to resolve allegations that it submitted inaccurate diagnosis codes for Medicare Advantage (MA) enrollees and failed to correct codes that its own chart reviews did not substantiate.

MA plans receive monthly payments that are adjusted in part using enrollees’ diagnosis codes. According to the government, IBX conducted retrospective reviews of medical records to identify diagnoses that providers had not reported. IBX submitted additional codes supported by those reviews, sometimes increasing its Medicare payments.

The government alleges that the reviews also failed to substantiate some diagnoses that providers had previously reported. IBX allegedly did not investigate or withdraw all of those codes, which the government contends resulted in retained overpayments. The government also alleges that IBX submitted annual certifications stating that its diagnosis data was accurate, complete, and truthful. The settlement agreement describes the government’s claims as including both false submissions and the improper avoidance of repayment obligations.

The case arose from a whistleblower lawsuit filed by a former IBX employee. The whistleblower is to receive $3.825 million of the settlement.

Takeaways for Medicare Advantage organizations

MA risk adjustment fraud has quickly become one of the top enforcement priorities of the DOJ. A little over a month prior to this settlement, the DOJ announced a $541.5 million settlement with MA organization Villages Health alleging similar allegations.

• Review findings in both directions. A chart review that identifies codes to add may also raise questions about codes already submitted. Establish a process for evaluating both kinds of findings.
• Create a clear path from a questionable code to a decision. Assign responsibility for investigating the underlying record, documenting whether a diagnosis remains supportable, and making any required correction or repayment.
• Connect certification to the review process. Before certifying diagnosis data, confirm that significant unresolved findings have been escalated and addressed. Retain records showing what was reviewed and how decisions were reached.

DOJ’s allegations focus on the gap between what IBX’s chart reviews allegedly revealed and how IBX acted on those results. Plans should examine whether their own review processes consistently carry potentially unsupported diagnoses through investigation and resolution.

GWB represents healthcare providers in connection with government investigations and False Claims Act litigation. If you need assistance with such a matter, contact us today.