Two recent False Claims Act cases have taken aim at a new target — Managed care plans.
At their introduction, managed care plans seemed less vulnerable to fraud than fee-for-service plans due to how they're reimbursed, according to a National Law Review report. However, that may not be the case as there are incentives for managed care providers to engage in fraudulent activity regarding patient risk scores.
Managed care providers are paid a capitated payment based on the health of the population of beneficiaries. Although risk scores for individuals on fee-for-service plans and managed care plans with the same diagnoses and characteristics should be identical, risk scores for managed care plan beneficiaries tend to be higher.
One explanation for the difference may be that managed care providers have a greater incentive to document all possible medical diagnoses because the plan's financial viability depends on it. However, the incentive could also motivate some physicians to artificially inflate diagnoses to increase the risk score and resulting payments, according to the report.
This example is illustrated by two recent False Claims Act cases. In U.S. ex rel. Valdez v. Aveta, the whistle-blower alleges the health system "knowingly overstated, and/or concealed and failed to correct their overstatements of, risk adjustment scores," according to the report.
Similar allegations were made by the whistle-blower in U.S. ex rel. Graves v. Plaza Medical Centers, Humana. In that lawsuit, the whistle-blower claims Humana knew or should of known that the number of patients being diagnosed with diabetes and renal or circulatory complications increased significantly when a new physician took over a long-standing medical practice in Florida. The whistle-blower further alleges the inflated diagnoses led to increases in capitated payments for those patients.
These two cases are among six that have been filed in the last five years that indicate an enforcement trend focused on managed care plans, according to the report.
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