HealthCare Partners Holdings LLC, part of DaVita Inc., must pay $270 million to settle an allegation involving Medicare Advantage insurance plans.
According to a news release from the U.S. Department of Justice, DaVita Medical Holdings agreed to pay the money to resolve its liability under the False Claims Act. The Justice Department reported that HealthCare Partners provided “inaccurate information that caused Medicare Advantage Plans to receive inflated Medicare payments.”
Medicare beneficiaries have the option of enrolling in and obtaining health care from Medicare Advantage Plans that are owned and operated by private Medicare Advantage Organizations (MAOs). To provide the patient care, MAOs may contract directly with physicians and other healthcare providers, or they may contract with Medical Services Organizations, which in turn either employ or contract with healthcare providers.
DaVita operated a Medical Service Organization and contracted with MAOs in various states, including California, Nevada, and Florida, to provide care to the MAOs’ enrolled Medicare beneficiaries. In connection with the medical services it provided to those beneficiaries, DaVita collected and submitted diagnoses to the MAOs. As payment for its services, DaVita received from the MAOs a share of the payments that the MAOs received from the Centers for Medicare & Medicaid Services for the beneficiaries under DaVita’s care.
A whistleblower alleged that HealthCare Partners engaged in “one-way” chart reviews in which it scoured its patients’ medical records for diagnoses its providers may not have recorded. It then submitted these “missed” diagnoses to MAOs, which in turn obtained increased Medicare payments. At the same time, HealthCare Partners ignored inaccurate diagnosis codes that should have been deleted and that would have decreased Medicare reimbursement or required the MAOs to repay money to Medicare.
DaVita says the settlement “reflects close cooperation with the government to address practices largely originating with HealthCare Partners,” Kaiser Health News reported.
DaVita noted in a recent filing with the Securities and Exchange Commission that the settlement would be paid through escrow funds established in connection with DaVita’s merger with HealthCare Partners in 2012.
