Dive Brief:
- Complete Health, a value-based primary care provider in three states, has agreed to pay $14.1 million to settle accusations that it overcharged Medicare, the latest instance of a company dinged for allegedly gaming Medicare Advantage in order to profit.
- The settlement announced by the Department of Justice on Monday puts to rest a whistleblower lawsuit that said Complete submitted false diagnosis codes for its senior patients to increase its reimbursement in the privatized Medicare program from 2020 to 2023.
- The DOJ said the settlement shows regulators’ commitment to combating profiteering in MA, a hot-button issue as the program expands to more Medicare seniors and gobbles up more taxpayer dollars.
Dive Insight:
In MA, the government pays insurers a fixed payment per member each month that’s adjusted higher or lower based on the health needs of their enrollees. The CMS calculates this adjustment based on seniors’ medical diagnoses, with a more severe diagnosis or more expensive treatment boosting a member’s risk score — and the corresponding reimbursement for their insurer.
That creates an incentive for MA organizations to exaggerate their members’ health needs to inflate their revenue, a practice called upcoding. It’s a big problem, especially as Medicare buckles under sustained financial stress: Upcoding is expected to drive $22 billion in additional MA spending compared to traditional Medicare this year, according to congressional advisory group MedPAC.
Though major MA insurers are most frequently criticized for upcoding, smaller entities haven’t been immune. Jacksonville, Florida-based Complete is the latest in regulators’ crosshairs.
The company, which was founded in 2018 by a private equity firm, manages affiliated providers in Florida, Alabama and Colorado.
Complete contracts with MA organizations to provide primary care services to their members on a shared-risk basis — meaning instead of charging for specific services, Complete receives a portion of that insurer’s MA reimbursement for the patients that it treats.
That gives Complete an incentive to ensure MA reimbursement is as high as possible, according to the DOJ — a goal the company achieved from 2020 to 2023 by mining patient records for conditions that didn’t exist or weren’t supported by medical evidence.
The company relied on upcoding for opioid use disorder, sedative dependence and major depressive disorder, according to the whistleblower suit filed by Karen Bowers, a risk adjustment professional formerly employed by Viva Health and Blue Cross and Blue Shield of Alabama.
Bowers, who says she discovered Complete’s practices when she worked at both insurers, will receive about $2.5 million under the qui tam or whistleblower provisions of the False Claims Act.
The lawsuit also accuses Viva and BCBS Alabama of knowing that Complete’s diagnosis codes were wrong but submitting them to the CMS anyway to increase their reimbursement. The two companies were not named in the DOJ’s settlement, and the department did not respond to a request for comment on the status of the allegations against them.
“As the Medicare Advantage program continues to grow, providers who participate in the program must be held to account when they attempt to improperly profit at the taxpayer’s expense,” Assistant Attorney General Brett Shumate of the DOJ’s Civil Division said in a statement. “This settlement reflects the Department’s commitment to protecting taxpayer money and ensuring that Medicare payments are based on information that is true and accurate.”
Combating fraud in government healthcare programs has been a key focus of the second Trump administration — including in MA, as overpayments become a growing concern for lawmakers and regulators on both sides of the political divide.
The CMS has moved ahead with accelerated audits of MA plans and clawed back overpayments, including from major for-profit insurers. The agency has also reformed how MA companies calculate the health needs of their members, finalizing a rule this spring removing one tool insurers use to record additional diagnoses. Though, the CMS jettisoned other suggested changes that would have made payments more accurate and finalized a generous rate hike for insurers.
Complete did not respond to a request for comment for this story.
