A new whistleblower case accuses a Texas medical consulting firm and more than two dozen health plans for the elderly of ripping off Medicare by conducting in-home patient exams that allegedly overstated how much the plans should be paid.
The Texas litigation is just the latest of at least a half dozen whistleblower cases that have been filed in the past five years alleging billing fraud and lax government oversight of privately-run Medicare Advantage plans that have proven increasingly popular with senior citizens.
The latest lawsuit was filed in federal court in Dallas by Becky Ramsey-Ledesma, a medical billing coder, against her former employer, CenseoHealth, LLC. The Dallas-based firm has contracted with thousands of doctors who visit elderly people in their homes and evaluate their health on behalf of Medicare Advantage plans.
But the health assessments exaggerated how ill patients were, which in turn inflated Medicare payments to the health plans, according to the allegations in the suit. The suit names 30 Medicare Advantage plans in 15 states, including several Blue Cross plans and other industry stalwarts, such as Humana Inc. Humana has more than three million Medicare members.
The private insurance plans offer seniors an alternative to standard Medicare, which pays doctors for each service they render. Medicare Advantage plans receive a set fee monthly for each patient based on a risk score that pays higher rates for sicker people and less for those in good health. Medicare essentially trusts health plans to report these risk scores accurately. The Medicare Advantage plans have grown rapidly in recent years, and now cover almost 17 million people.
The Texas suit was filed last year, but stayed under court seal until mid-June. It is the second whistleblower action to target Medicare Advantage home visits, which account for billions of dollars in annual revenues for health plans.
A 2014 Center for Public Integrity investigation found that home visits skyrocketed as federal officials struggled to prevent health plans from overcharging Medicare by tens of billions of dollars every year. Federal officials as early as 2013 were concerned the home visits could be a factor in jacking up risk scores improperly and wasting tax dollars. But they backed off a proposal to limit their use when the industry objected, the investigation found.
CenseoHealth’s home visits collect data on the health status of patients, which the private health plans then use to bill Medicare. The company had no comment on the lawsuit.
The Centers for Medicare and Medicaid Services press office declined to answer written questions seeking comment on its home visit policy. The agency instead issued a statement that said the home exams can have “significant value.” That opinion is shared by the health insurance industry trade group, America’s Health Insurance Plans. A spokesperson for AHIP called the visits “an important component of disease management activities.”
Medicare Advantage is enjoying robust growth and firm political support in Congress. The industry has beaten back several attempts by the Obama administration to cut its rates as enrollment has grown to encompass about one in three people on Medicare. In June, the House passed a bill sponsored by Rep. Vern Buchanan, R-Florida, that appears to prevent federal officials from halting the home health assessments.
At the same time, the Centers for Medicare and Medicaid Services is drawing scrutiny over top manager Andy Slavitt’s former ties to UnitedHealth Group, which runs the nation’s biggest Medicare Advantage plan. Senate Finance Chairman Orrin Hatch criticized Slavitt’s “conflicted history” in a statement issued after President Obama nominated him for the top CMS job in July.