Sutter Health recently settled allegations of mischarging the Medicare Advantage Program. The $90 million settlement is the second-largest settlement under the False Claims Act against a hospital provider, the second-largest in California. The settlement resolves a U.S. Department of Justice intervention into Medicare Advantage (also known as Medicare Part C) fraud cases.
Enrollment in Medicare Advantage has doubled in the past decade to $350 billion market annually. Its’ enrollment now makes up more than 41% of all Medicare beneficiaries. This program authorizes qualified individuals to opt-out of the fee-for-service coverage employed by Medicare Parts A and B and enroll in privately-run managed care plans that cover inpatient and outpatient coverage. Medicare C pays for care monthly based on the patient’s medical records and diagnosis codes, known as risk adjustment factor (RAF).
The whistleblower took action
The settlement is the result of whistleblower Kathy Ormsby. She alleged that Sutter Health and its related affiliates intentionally submitted inaccurate and unsupported medical information involving thousands of patients enrolled in Medicare Advantage for about six years. A former Sutter Health RAF manager, Ormsby filed the qui tam lawsuit in 2015 alleging that the company knowingly gamed RAF scores to bill an additional $100 million fraudulently. Ormsby subsequently cooperated with the Department of Justice and continues to pursue settlements involving other allegations. Due to Ormsby’s vital role as a whistleblower, she is entitled to 15% to 30% of the settlement.
While Fischer Legal Group was not involved in this case, it hopes that this settlement will encourage other Medicare Part C whistleblowers to step forward to hold other health care systems accountable for stealing from the taxpayer-supported Medicare. Hopefully, it also reminds providers that it is best to put patients’ well-being over fraudulently gained profits.
