Medicare Advantage Provider Agrees to Pay $14.1 Million to Resolve False Claims Act Allegations Involving Unsupported Diagnosis Codes

The Department of Justice (DOJ) has announced that Florida-based management services organization Complete Health Partners Holdings agreed to pay $14.1 million to resolve allegations that it violated the False Claims Act (FCA) by causing false diagnosis codes to be submitted to the Medicare Advantage program. 

According to the government, Complete Health’s contracts with Medicare Advantage Organizations (MAOs) entitled it to a percentage of the payments the MAOs received from the Centers for Medicare & Medicaid Services (CMS). The government alleged that this risk-sharing compensation arrangement created a financial incentive to add diagnoses that increased beneficiaries’ risk scores and the resulting CMS payments. 

Risk-Adjustment Coding and Clinical Support

The settlement resolves allegations that Complete Health submitted diagnosis codes within Hierarchical Condition Category (HCC) 55, covering drug and alcohol dependence, and HCC 59, covering major depressive, bipolar, and paranoid disorders, that were not clinically valid, were not properly supported by the beneficiaries’ medical records, and/or were not considered in the beneficiaries’ care, management, or treatment.

The government further alleged that Complete Health gave incorrect coding guidance to coders and physicians. According to the settlement agreement, coders placed suggested risk-adjusting diagnoses in electronic medical records before visits, sent leading post-visit queries when physicians did not select those diagnoses, and in some instances added diagnoses for submission to MAOs after a visit without provider involvement. The government alleged that the resulting codes increased CMS payments to the MAOs, a portion of which was passed to Complete Health.

The resolution reinforces that risk-adjustment diagnoses must be supported by contemporaneous medical-record documentation and clinically relevant to the encounter. Provider organizations should ensure that coding prompts and queries are neutral, permit clinicians to reject suggested diagnoses, and preserve a clear record of the clinician’s independent validation. Compliance testing should also identify diagnoses added after an encounter, recurring high-value HCCs, and coding patterns that are inconsistent with treatment or care-management activity.

The resolution arose from a qui tam action filed by Karen Bowers, a former Associate Director of Risk Adjustment at VIVA Health. Bowers will receive $2.5 million as her share of the federal recovery.

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.