A whistleblower will receive more than $10 million in a false Medicare billing lawsuit settlement.

Plaintiff James S. was a former employee at a Medicare Advantage Organization (MAO) that did business with Davita Medical Holdings LLC, also known as HealthCare Partners Holdings LLC.

James alleged in his false Medicare billing lawsuit that HealthCare Partners conducted “one-way” chart reviews and pored over patient medical records for medical diagnoses that providers might have failed to report. The “missed” diagnoses were then sent to MAOs to obtain increased Medicare payments, James alleges.

Even though new diagnoses were allegedly added, James says inaccurate diagnosis codes were not deleted, a move that would have either decreased the Medicare reimbursement or required the MAOs to pay back a certain amount of money owed to the Medicare program.

James initiated the false Medicare billing lawsuit under the qui tam, or whistleblower, provisions of the Federal False Claims Act, which allows a private person to file suit on behalf of the U.S. government for false claims. As many rewarded whistleblowers have found, those who report false claims may obtain a portion of the money recovered. In this case, James will receive $10,199,100 in the false Medicare billing settlement.

$270 Million False Medicare Billing Settlement

James will receive more than $10 million in the settlement because his actions led to the federal government discovering HealthCare Partners had disseminated incorrect medical coding guidance to doctors, instructing them to use improper diagnosis codes. The allegedly incorrect coding enabled HealthCare Partners and Davita to collect inflated Medicare payments, allegedly since at least 2012.

“This settlement demonstrates our tireless commitment to rooting out fraud that drains too many taxpayer dollars from public health programs like Medicare,” said United States Attorney Nick Hanna in a press release from the Department of Justice. “This case involved illegal conduct in which patients’ medical conditions were improperly reported and were not corrected after further review – all for the purpose of boosting the bottom line. We will continue to pursue and hold accountable any entity that seeks to illegally increase revenue at the expense of the Medicare Advantage so that the program may continue to remain viable for all who need it.”

The false Medicare billing settlement did not result in any declarations of guilt or confirmation of liability. The settlement was reached through coordinated efforts of HHS-OIG, the Civil Division’s Commercial Litigation Branch, and the United State Attorneys Office for the Central District of California.

DaVita voluntarily told the government of the various aberrant billing practices. Because of DaVita’s cooperation with the government’s investigation, the U.S. government agreed to the settlement.

Assistant Attorney General Joseph H. Hunt of the Department of Justice’s Civil Division said, “Federal healthcare programs rely on the accuracy of information submitted by healthcare providers to ensure that managed care plans receive the appropriate compensation.” He added, “We will pursue those who undermine the integrity of the Medicare program and the data it relies upon. This also illustrates that the Department encourages and incentivizes health care organizations to make voluntary disclosures to the government when they identify false claims.”

The False Medicare Billing Lawsuit is Case No. 09-5013 for the Central District Court of California.