Risk Adjustment Whistleblower Ross Recalls Exclusion, Isolation, Gaslighting

As Medicare Advantage insurers seek ways to maximize revenue in a fiscally challenging environment, the accurate and complete capture of diagnosis codes is paramount. That’s because their reimbursement is dependent on the documented health of their enrollees and related risk scores. But risk adjustment comes with inherent compliance risks, demonstrated by pending lawsuits involving the use of chart review and addenda programs and a recent settlement involving whistleblower Teresa Ross, a former MA plan employee who spoke at the 2025 RISE National conference.

“It’s a very isolating and lonely time. The whole time the company is gaslighting you. You say too much, so then you get excluded from meetings,” said Ross. At one point, her employer sent a mental health counselor to her office “to try to tell me that I was wrong for not going along,” she recalled.

The False Claim Act (FCA) imposes treble damages and penalties on individuals and organizations that knowingly and falsely file claims for payment from the U.S. government. It is the government’s primary civil enforcement mechanism for pursuing liability against health care providers. Since 1986, the government has recovered nearly $80 billion under the FCA; $54 billion of those recoveries involved fraud against HHS and $55 billion were initiated by a whistleblower, Ross’s attorneys told attendees at a recent session of the RISE National 2025 conference, held March 11-14 in San Antonio, Texas.

In the fiscal year ending Sept. 30, 2024, the U.S. Dept. of Justice (DOJ) recovered more than $2.9 billion through FCA settlements and judgments; more than $1.67 billion of those funds involved health care. In December 2024, the DOJ reached a key settlement in the yearslong case filed by Ross, a former employee of Group Health Cooperative (GHC). In that settlement, Independent Health Association, a not-for-profit MA 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 FCA allegations involving their retrospective scraping of medical records and querying of physicians for information that would support additional diagnoses for reimbursement. 

“What’s significant about Teresa’s case is that this is one of the first times we’ve seen not just two health plans settle for up to $100 million, Independent Health” and GHC, which is now Kaiser Foundation Health Plan of Washington and agreed to pay $6.3 million, “but Betsy Gaffney, the founder and CEO of the now defunct vendor DxID, also had a settlement in this case,” said Mary Inman, one of Ross’s attorneys. Under the settlement agreement, Gaffney agreed to pay $2 million, and Independent Health was permitted to split up its payments into guaranteed payments totaling $34.5 million and additional contingent payments on behalf of itself and DxID, which ceased operations in 2021.

As part of its settlement terms, Independent Health entered into a five-year corporate integrity agreement with the HHS Office of Inspector General. The claims resolved by both settlements are allegations only, and no liability was determined.

When Inman first brought Ross’s case to the federal government, there was “no DOJ team” that was “schooled up” on risk adjustment, and government prosecutors who interviewed Ross largely drew on her risk adjustment knowledge to understand the complex issues at play, Inman recalled. “That is one of the biggest and best parts about this, that a whistleblower can bring their expertise and make it known why the government should listen,” she told conference attendees.

“It’s even developing now, where the government has a bunch of prosecutions on basically risk adjustment upcoding…making a population seem less healthy than it actually is,” added Max Voldman, another of Ross’s attorneys. “But now they’re pivoting to kickbacks pretty noticeably and violations of marketing regulation. So, [there’s] a lot more to come.”

Ross Tried Multiple Internal Channels

During the session, Ross recalled how she learned of GHC’s scheme and ultimately became the only internal person opposed to it despite initial objections from colleagues. She explained that after the CEOs of GHC and Independent Health met at a conference, GHC partnered with DxID, a risk adjustment vendor owned by Independent Health that earned 20% of “whatever they could cover.” In other words, they had an incentive to upcode and ignore CMS guidance on where codes could be obtained from, she asserted.

DxID also had a form that Independent Health used to add certain conditions to the medical records, but GHC did not adopt this method, Ross attested. And even after the complaint was filed, Independent Health continued its addendum method, she alleged.

Before filing her complaint in 2012, Ross tried to raise awareness within GHC that the organization was ignoring CMS guidance as well an HHS Office of Inspector General advisory opinion against incentivized contingency fee arrangements for vendors. “We worked internally to try get them to stop and basically couldn’t,” she recalled. When she was asked to sign an internal attestation that the data being submitted to CMS was accurate and complete, she refused to sign it and consulted an employment attorney, who told her she had a fraud case and connected Ross with Inman.

The compliance department, meanwhile, was largely absent until it brought in an attorney, she recalled. “If you ever are in that position, No. 1, I really highly recommend that you try every internal channel that you can try. I went to internal audit. We had a whistleblower hotline. I called the whistleblower hotline.…A year and a half later, they [were] still engaging in this behavior.”

It “doesn’t matter what industry you’re in,” the typical corporate response to whistleblowers is to “get medieval” on them rather than saying, “‘Thank you so much for showing us where the problems lie,’” added Inman, who has represented whistleblowers in cases across multiple industries.

It is worth noting that the DOJ did not technically intervene until 11 years into Ross’ case, and only about 20% of FCA lawsuits end in recovery without the government, said Voldman. “As a whistleblower lawyer, all we want is the government to join our case. We launched the case on the government’s behalf, but we’re just there standing in their shoes…the government is the victim,” added Inman.

For various procedural and timing reasons, the government was unable to intervene in July 2019 and the case was made public. In November 2020, Ross’s former employer settled; a year later, the government was allowed to intervene and filed its complaint-in-intervention. Ross will receive at least $8.2 million as part of the settlement, “but she also gets paid only as that money comes in,” said Inman.

MA Insurers May See Increased Enforcement

The Ross settlement was one of three key developments in FCA cases involving risk adjustment last year, according to Bass Berry & Sims’ recently released Healthcare Fraud & Abuse Review 2024. The others, U.S. ex rel. Khushwinder Singh v. Aledade Inc. and Zafirov v. Florida Medical Associates, LLC, involved alleged “upcoding” through accountable care organizations and the submission of false and unsupported risk adjustment data through “5 Star Check Lists,” respectively.

Given these settlements and other pending cases involving the use of addenda and chart reviews, the trend of risk adjustment litigation is an added headwind as MA insurers experience elevated medical claims and transition to the new v28 risk adjustment model.

“In order to lessen the impact and prevent significant premium increases or material changes to benefits, they are undoubtedly looking to cut costs and focus on diagnosis capture. The threat of enforcement has moved the industry towards a more compliant and conservative approach to risk adjustment,” Jason Christ, a member with the law firm Epstein Becker Green, tells AIS Health, a division of MMIT.

Meanwhile, “the new administration is taking an aggressive stance on federal spending. Although many believe that HHS could have a more favorable view of Medicare Advantage compared to the Biden administration, enforcement has always enjoyed bipartisan support,” points out Christ, who presented on risk adjustment compliance and audit strategies at RISE National. “Medicare Advantage has eclipsed traditional Medicare and represents a significant portion of government health care spending. Given the imbalance between fee-for-service Medicare False Claims Act recoveries by DOJ versus Medicare Advantage recoveries, I would put my money on increased enforcement.”

This article was reprinted from AIS Health’s biweekly publication Radar on Medicare Advantage.