Martin's Point Healthcare to Pay $22.5 Million to Settle False Claims Act Allegations

Martin's Point Health Care Inc., a healthcare provider based in Portland, Maine, has reached a settlement with the Department of Justice (DOJ) to pay $22.5 million to resolve allegations of violating the False Claims Act. The accusations were related to submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees, leading to increased reimbursements from Medicare.

Medicare Advantage, also known as the Medicare Part C program, offers Medicare beneficiaries the option to enroll in managed care insurance plans called Medicare Advantage Plans (MA Plans). These plans receive a per-person payment to provide Medicare-covered benefits to enrolled beneficiaries. The Centers for Medicare and Medicaid Services (CMS), the overseeing body for Medicare, adjusts payments to MA Plans based on demographic information and the diagnoses of each beneficiary, commonly referred to as "risk scores." Beneficiaries with more expensive-to-treat diagnoses receive higher risk scores, resulting in larger risk-adjusted payments to the MA Plan.

Martin's Point operates Medicare Advantage plans for beneficiaries residing in Maine and New Hampshire. The allegations against the company focused on the period from 2016 to 2019, during which they engaged in chart reviews of their Medicare Advantage beneficiaries to identify additional diagnosis codes not previously submitted to Medicare. However, it was claimed that many of these additional codes lacked proper support from the patients' medical records. Despite this, Martin's Point allegedly submitted these diagnosis codes, leading to higher payments from CMS.

Deputy Assistant Attorney General Michael D. Granston of the Justice Department's Civil Division, Commercial Litigation Branch, emphasized the importance of accurate information in Medicare Advantage to ensure proper payments for beneficiaries' care. He stated that today's settlement sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement.

Deputy Inspector General for Investigations Christian J. Schrank at the Department of Health and Human Services, Office of Inspector (HHS-OIG), also commented on the case, highlighting that Medicare Advantage Plan sponsors must provide accurate claim information and not justify inflated payments, as it undermines the financial integrity of the program. HHS-OIG remains committed to safeguarding taxpayer-funded health care programs, including Medicare Advantage.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Alicia Wilbur, a former manager in Martin's Point's Risk Adjustment Operations group. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of the settlement, the whistleblower will receive approximately $3.8 million.

The investigation and resolution of this matter showcase the government's commitment to combat healthcare fraud. The False Claims Act remains one of the most potent tools in this effort. The DOJ's coordinated effort involved the Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney's Office for the District of Maine, with assistance from HHS-OIG.

The case serves as a reminder for all stakeholders to report potential fraud, waste, abuse, and mismanagement in healthcare programs. Tips and complaints from all sources can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Trial Attorney J. Jennifer Koh of the Justice Department's Civil Division, along with Assistant U.S. Attorneys John Osborn and James Concannon for the District of Maine, with support from the U.S. Attorney's Office's in-house auditor.

Martin's Point Healthcare's settlement underscores the importance of compliance and accuracy in healthcare billing and reimbursement processes. The resolution not only holds the company accountable for its actions but also serves as a warning to other Medicare Advantage providers about the consequences of submitting inaccurate claims for financial gain. The DOJ's commitment to combating healthcare fraud remains steadfast, and the False Claims Act continues to play a significant role in ensuring the integrity of healthcare programs.