A Seattle-based Medicare Advantage plan has been named as a defendant in a federal whistleblower fraud in healthcare case that until October had been under court seal.

Teresa R., a former medical billing manager for Group Health Cooperative, filed her lawsuit in 2012, alleging that the insurer defrauded $8 million from Medicare for services rendered in 2010 to recoup losses the company incurred that year resulting from poor decision-making on the part of management.

The plaintiff claims Group Health Cooperative engaged in fraud in healthcare by “claiming that some patients were sicker than they were or by billing for medical conditions that patients didn’t actually have,” according to NPR.

The Co-Defendants

Two New York medical coding companies, DxID and Independent Health Association, are named co-defendants in the fraud in healthcare case. Both have denied allegations of wrongdoing and moved to have the case dismissed, according to The Seattle Times.

What is a Whistleblower Lawsuit?

A whistleblower lawsuit — legally known as a qui tam suit —  is one filed under the federal False Claims Act (FCA) which allows private citizens to register legal claims on behalf of the U.S. government. The aim is to empower people to be the “eyes and ears” of the government to help identify fraud in public health and other programs reliant upon ethical contracted services and supply chains provided by private business.

The Department of Justice is investigating the allegations against Group Health Cooperative and the other defendants.

Medicare Advantage Managed-Care Plans

NPR characterized Group Health Cooperative as one of the country’s “oldest and most respected nonprofit health insurance plans,” noting that Medicare and other health care industry groups have held the company and its Medicare Advantage plans in high regard.

“A coalition of unions, farmers and local activists” formed the company more than 70 years ago and in that time it has grown to insure 600,000 patients, according to the Seattle Times. In 2017, California-based Kaiser Permanente acquired the company for $1.8 billion. At the time, the newspaper reported that Group Health Cooperative had $3.5 billion in annual revenue.

Nevertheless, fraud by these plans has become a blight for U.S. taxpayers with 18 cases documented by Kaiser Health News. The cases  often revolve around gross exaggeration of conditions for the purposes of securing more payments from the government. In five of the cases, the government recovered some $360 million in overpayments.

What is a Medicare Advantage Managed-Care Plan?

According to Medicare.gov, a Medicare Advantage Plan brings together key elements of traditional Medicare known as Part A—hospital insurance—and Part B—standard medical insurance, along with Part D—prescription drug coverage. Additionally, however, these plans bundle extra eye, dental, and ear (hearing) care coverage.

This article is not legal advice. It is presented
for informational purposes only.