A New York health insurer and one of its former executives have reached a settlement with the Justice Department, agreeing to pay up to $100 million to resolve allegations of Medicare fraud. The lawsuit, filed in 2021, accused Independent Health, its subsidiary DxID, and former CEO Betsy Gaffney of engaging in a scheme to inflate the severity of Medicare Advantage patients’ conditions in order to receive higher reimbursements from the government.
According to the government’s claims, the defendants systematically reviewed medical records of Medicare Advantage patients to identify potential diagnoses that would result in higher payments. They allegedly pressured doctors to confirm these diagnoses, leading to Independent Health receiving millions of dollars in excess payments from Medicare. This case marks the first time a lawsuit targeting Medicare Advantage fraud has also named a vendor as a central player in the scheme.
Medicare Advantage fraud has been a recurring issue in the healthcare industry, with several insurers facing similar allegations in the past. However, this particular case sheds light on the role of vendors like DxID in facilitating fraudulent practices. By holding both the insurer and its vendor accountable, the Justice Department aims to send a strong message to the industry about the consequences of exploiting government healthcare programs for financial gain.
The settlement underscores the government’s commitment to combating healthcare fraud and protecting taxpayer dollars. It also serves as a warning to other insurers and vendors that engage in deceptive billing practices. Moving forward, it is crucial for all stakeholders in the healthcare system to prioritize integrity and compliance with regulations to ensure the sustainability and trustworthiness of Medicare and other government-funded programs.
