A major California-based health care system, Sutter Health, and several of its medical practice foundation affiliates have agreed to pay a total of $90 million to settle allegations that they violated the False Claims Act ("FCA") by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Sutter Health's contracted Medicare Advantage ("MA") Plans.1 The Sutter Health settlement is the largest FCA settlement ever paid by a health care provider for alleged MA fraud.
The lawsuit, which was originally filed in 2015 by a former employee whistleblower, alleged that Sutter Health knowingly submitted diagnosis codes to its contracted MA Plans that were unsupported by the patients' medical record in order to increase its reimbursement for services provided by Sutter Health to its MA Plan enrollees.2 In announcing the settlement, the U.S. Department of Justice ("DOJ") continues to highlight its ongoing efforts to address fraud within the MA program - including upcoding by submission of unsupported diagnoses codes to enhance MA Plan and provider reimbursement under the MA risk adjustment program.
To provide services to Medicare beneficiaries who elect to receive their Medicare benefits through MA Plans - Medicare's managed care option - MA Plans are paid by the MA program based upon a capitated (per-enrollee) monthly amount. The...
