Tampa-Fla.-based Freedom Health Inc. agreed to settle a False Claims Act case that alleged the Medicare Advantage organization engaged in “illegal schemes to maximize their payment from the government,” according to the Department of Justice (DOJ).
The company’s former Chief Operating Officer Siddhartha Pagidipati also agreed to pay $750,000 for his alleged role in the case.
The Department of Justice said Freedom Health submitted or caused others to submit “unsupported diagnosis codes to CMS,” which caused larger than owed reimbursements from 2008 to 2013. The company also reportedly made “material misrepresentations to CMS regarding the scope and content of its network of providers” in applications to CMS in 2008 and 2009, said the DOJ.
Acting Assistant Attorney General Chad A. Readler of the DOJ’s Civil Division said in a statement the settlement “sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information.”
The allegations began as a whistleblower case involving a former employee, Darren D. Sewell. Sewell will get a share of the settlement, but that amount hasn't been determined yet, according to the DOJ.
The DOJ and state investigators have turned up on the heat on alleged healthcare fraud. Medicare Advantage, which Congress created in hopes of containing healthcare costs, has been the focus of other fraud cases. In the biggest case, the DOJ alleges that UnitedHealth, which is the largest Medicare Advantage provider with 50 Medicare Advantage and drug prescription plans, overbilled Medicare. That is the second time this year DOJ has targeted UnitedHealth for overbilling in Medicare Advantage.
The federal government is also investigating other payers involved in Medicare Advantage, including Aetna, Bravo Health, Cigna, Health Net and Humana.
Chief Counsel to the Inspector General Gregory Demske of the HHS Office of Inspector General said his office will continue to make sure “Medicare Advantage insurers . . . play by the rules and provide Medicare with accurate information about their provider networks and their patients’ health.”