When I was first hired as an OIG Agent, I was told by numerous people that fraud in the Medicare Advantage (MA) world was difficult to commit, and ever more difficult to prove. To put it into context, it was the mid-1990s, and MA plans were not where they are today. 

That being said, I always thought that was an odd perspective. I may agree that from the provider side, there are some challenges, since capitated payments can potentially curtail some of the FWA issues, but not all of them. Providers can still make a patient appear to be more ill than they are, or have comorbidities that could place the patient into a higher risk category. 

That “bump” in risk scoring will lead to a higher capitated payment.  More so, however, was my thought that the MA plan itself was in a position to receive higher amounts based on having a “sicker” population.  I had heard the terms “cherry picking” and “lemon dropping” in reference to selecting only healthy patients and dropping the “sick” patients from the MA plan, but never actually saw it in practice. 

Over the past few months, however, there has been a steady uptick in press releases and news articles about investigations and prosecutions that directly target these MA plans. Many of these investigations appear to center around the same sort of patterns of behavior; making patients appear to be “sicker” to receive higher amounts for the plan. 

The same sort of scheme that a provider could be engaging in may actually be the foundation for the scheme perpetuated by the MA plan itself. In one sense, I want to facepalm, and in another sense, it is a turning of the tables.  The MA plan undertook the same fraud scheme that the provider has undertaken by manipulating the risk scoring to provide an appearance of illness that may not have existed. It is almost an “evil genius” scenario. 

It will be very interesting to see how some of these cases land. In at least one of the cases that I have read about, there are whistleblowers, who purportedly have very inside information on how the scheme was completed internally. I have been stating for quite some time that Relators (the legal term for a whistleblower) are an invaluable source of information for government investigations and prosecutions. 

Some of the whistleblower cases (known as a Qui Tam) that I worked on resulted in hundreds of millions of dollars in recoveries to government payers (my largest was $340 million).  As these matters unfold, it could trigger some very focused investigations by the OIG (from a criminal and civil investigative perspective) and lead to huge settlements.  As with everything, these matters will take some time to unfold, but will be interesting to follow, nonetheless.

Study: Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments (HHS-OIG)

By Eric Rubenstein