Independent Health to Pay $98 Million for Submitting Fraudulent Medicare Claims

On December 20, the U.S. Department of Justice (DOJ) announced that New York-based Independent Health has agreed to settle for up to $98 million for violations of the False Claims Act. The company was found to have knowingly submitted invalid diagnosis codes to Medicare in order to increase reimbursements for its Medicare Advantage plan enrollees.

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The DOJ revealed that Independent Health created a subsidiary, DxID LLC, to retroactively review medical records and prompt physicians to provide additional diagnoses. These falsified diagnoses were used to inflate risk scores and, in turn, Medicare payments. The complaint alleges that, from 2011 to 2017, Independent Health, with assistance from DxID and its founder, Betsy Gaffney, submitted unsupported diagnoses to CMS in violation of federal regulations.

"This settlement sends a strong message to the Medicare Advantage community that fraudulent claims will not be tolerated," said Deputy Assistant Attorney General Michael Granston of the DOJ’s Civil Division.

Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG) emphasized the importance of rigorous enforcement, stating that entities attempting to manipulate federal programs for financial gain must be held accountable.