Medicare Fraud Settlement Hits Independent Health
Settlement Overview
Independent Health faces a massive $98 million settlement over Medicare Advantage fraud allegations involving its former subsidiary, DxID. The settlement addresses claims of systematic diagnosis code manipulation aimed at increasing government reimbursements.
Fraudulent Activities Exposed
DxID, which ceased operations in 2021, allegedly conducted retroactive medical record searches to artificially inflate Medicare Advantage enrollees’ risk scores. Their services extended beyond Independent Health, offering similar coding assessment services to other health plans.
Whistleblower’s Role and Compensation
Teresa Ross, a former Group Health Cooperative employee, exposed the fraudulent practices through a whistleblower lawsuit. Her actions will result in a minimum $8.2 million compensation from the settlement. Additionally, DxID’s former CEO, Betsey Gaffney, has agreed to pay $2 million.
Settlement Structure
The agreement includes:
- Guaranteed payments of $34.5 million
- Potential additional payments up to $63.5 million based on payment ability
- No admission of wrongdoing from Independent Health
Industry-Wide Context
The case highlights a broader issue within Medicare Advantage, as numerous major plans have faced similar upcoding allegations. These practices involve making patients appear sicker on paper to secure higher government reimbursements.
Company Response
Independent Health, a Buffalo-based nonprofit insurer, maintains that the settlement allows them to avoid prolonged litigation costs and uncertainty. They emphasize that the dispute didn’t affect member care quality or claim payments, and they remain committed to serving their community with integrity.
