News Briefs: Independent Health Will Pay $98M to Settle Medicare Advantage Upcoding Allegations

Jan 02
Jan 02, 2025

Independent Health Association, a not-for-profit Medicare Advantage plan headquartered in Buffalo, New York, and its for-profit owner Independent Health Corp. (collectively, Independent Health), agreed to pay up to $98 million to settle False Claims Act allegations involving a chart review and upcoding scheme used to seek inflated reimbursement. The allegations originated in a whistleblower complaint filed in 2012 against Group Health Cooperative, DxID LLC and its former CEO, Betsy Gaffney. DxID was a wholly owned subsidiary of Independent Health that provided chart review and addenda services to the insurer and other MA plans until it ceased operations in August 2021. The complaint filed by Teresa Ross, who previously worked for Group Health Cooperative (which is now the Kaiser Foundation Health Plan of Washington), alleged that Kaiser hired DxID to identify additional diagnoses to be submitted for Medicare reimbursement. Kaiser resolved those claims in a separate settlement with the Dept. of Justice. In September 2021, the DOJ intervened in Ross’ amended complaint that alleged, for dates of services from Jan. 1, 2011, through Jan. 31, 2017, Independent Health knowingly submitted to CMS diagnosis codes captured by DxID that were not supported by medical records and were therefore not eligible for risk-adjusted payment. The “settling parties,” which include Gaffney, did not admit wrongdoing as part of the agreement, according to a Dec. 20 press release from the U.S. Attorney’s Office for the Western District of New York. Read more
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Lauren Flynn Kelly

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.