Independence Blue Cross Settles False Claims Act Allegations for $22.5 Million

Independence Blue Cross (IBX), a Pennsylvania-based insurance company, has agreed to pay $22. 5 million to settle allegations that it violated the False Claims Act. The allegations centered on IBX's failure to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees, which allowed the company to improperly retain overpayments from Medicare, according to the U.

S. Department of Justice.

The settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, known as United States ex rel. Crawford v. Independence Blue Cross. The whistleblower, a former IBX employee, will receive $3,825,000 from the settlement amount.

Allegations of Inaccurate Data Submission

The United States alleged that IBX submitted inaccurate patient diagnosis data to the Centers for Medicare & Medicaid Services (CMS), inflating the risk adjustment payments it received. Under the Medicare Advantage (MA) Program, CMS pays Medicare Advantage Organizations (MAOs) a fixed monthly amount adjusted for various risk factors, with higher payments for sicker beneficiaries expected to incur greater healthcare costs. The government contended that IBX knowingly failed to withdraw inaccurate diagnosis data and falsely certified to CMS that the data was accurate and truthful.

From 2017 to 2021, IBX operated a 'chart review' program where nurse reviewers examined medical records to identify supported medical conditions. However, some diagnosis codes reported by IBX to CMS were not substantiated by these reviews. Despite this, IBX did not delete or withdraw the unsupported diagnosis codes, which would have required reimbursement to CMS.

Government's Response and Accountability

Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division emphasized the importance of accountability, stating, "The government pays private insurers over $530 billion each year to care for Americans enrolled in Medicare Advantage. When insurers knowingly and improperly retain inflated payments based on inaccurate and untruthful diagnoses, we will hold them accountable."

U.S. Attorney David Metcalf for the Eastern District of Pennsylvania also highlighted the significance of accurate data in the Medicare Advantage program, noting that his office will continue to hold insurers accountable when they inflate profits and government costs by submitting or failing to correct unsupported diagnoses.

Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of the Inspector General, remarked on the importance of integrity in the Medicare program and the commitment to pursuing allegations of risk adjustment fraud.

The settlement was a coordinated effort between the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The resolution underscores the government's commitment to combating fraud, waste, and abuse in federal programs, ensuring that private insurers adhere to the rules and maintain the integrity of the Medicare program.