Dive Brief:
- Settlements and judgments under the False Claims Act reached record-breaking numbers last year, with the majority of actions involving the healthcare industry, according to the Department of Justice.
- The agency tallied more than $2.68 billion in FCA settlements and judgments in the fiscal year ended Sept. 30, 2023, including more than $1.8 billion related to managed care providers, hospitals, pharmacies, laboratories, long-term acute care facilities and physicians.
- Medicare Advantage enforcement is of “critical importance,” the DOJ said. As the number of beneficiaries enrolled in the privatized insurance coverage rises, stakeholders have raised concerns about fraud contributing to overpayments to MA plans.
Dive Insight:
The FCA imposes damages and penalties on people who knowingly and falsely claim money or knowingly fail to pay funds owed to the U.S. government. As such, the law is a valuable tool for regulators seeking to crack down on healthcare fraud.
In a Thursday release on FCA awards, the DOJ highlighted actions related to the Medicare Advantage program, where the government pays private insurers to manage beneficiaries’ care.
More than half of the eligible Medicare population was enrolled in these plans last year. Meanwhile, the cost has swelled: The government could pay MA plans $88 billion more this year than it would have spent if those enrollees were in traditional Medicare, according to data published in January by congressional advisory group MedPAC.
The cost spike is because MA payers attract healthier beneficiaries and then code aggressively to scoop up increased reimbursement from the government, according to MedPAC.
Upcoding was also cited in FCA settlements last year. Cigna, which recently announced plans to sell its Medicare businesses, agreed to pay $172 million in the fall to settle allegations the insurer had submitted inaccurate diagnosis codes for its MA enrollees to boost payments.
Portland, Maine-based Martin’s Point Health Care also agreed to pay $22.5 million in July to resolve claims it had entered false diagnosis codes to increase Medicare reimbursements.
Other enforcement priorities in 2023 included fraud in pandemic relief programs and alleged violations of cybersecurity requirements among government contracts and grants, according to the DOJ.
Cybersecurity has become a serious concern in the healthcare sector as organizations are increasingly targeted by attackers, potentially disrupting care and leaking patients’ sensitive health information.
Jelly Bean Communications Design and its manager agreed to pay more than $293,000 nearly a year ago to settle allegations that it had failed to secure data on a federally funded children’s health insurance website in Florida.
