DOJ Intervenes in Whistleblower’s False Claims Act Lawsuit Involving Martin’s Point Healthcare

The bad news just keeps on coming for Martin’s Point Healthcare in Portland, Maine.

The lawsuit includes a group of healthcare centers and also a health plan which operates Medicare Advantage plans for beneficiaries in Maine and New Hampshire. 

On a Monitor Monday broadcast last summer, I reported on the news that Martin’s Point had paid DOJ $22.4 million to resolve a False Claims Act case initiated by a whistleblower alleging that the plan had conducted chart reviews of their Medicare beneficiaries to identify and submit additional diagnosis codes that were not supported by the patient’s medical records and thereby improperly garnered inflated reimbursement amounts from the Centers for Medicare & Medicaid Services (CMS). 

As alleged, this is a practice that has come to be known more broadly as risk adjustment fraud and has swept up many healthcare plans and healthcare providers in its wake.  DOJ has settled with several other major healthcare industry players, including Cigna, Sutter Health, and Freedom Healthcare, to resolve allegations of risk adjustment fraud. The DOJ also has ongoing litigation against others, such as UnitedHealth Group, Kaiser Permanente, and Independent Health. 

Flash forward eight months and Martin’s Point once again is back in the news making headlines.  This time, Martin’s Point is joined by five other health plans that provide health coverage to military families. These plans include Brighton Marine, Christus, John Hopkins, PacMed and St. Vincent’s, and their industry trade group, U.S. FHP Alliance, all of whom are now defendants in a False Claims Act case that was recently unsealed. 

On March 13, DOJ issued a press release noting that it was joining a False Claims Act case launched by two whistleblowers, both of whom had close ties to Martin’s Point. One was a former interim CFO. The other one had acted as a consultant to the CEO and Board and later served on its Board of Directors.  

Through the Uniformed Services Family Health Plan (USFHP), the Department of Defense pays health insurance plans capitated rates to provide healthcare services for their enrollees.   

In its Complaint in Intervention, DOJ alleges that the six health plans became aware of two errors made by actuaries that had been retained to calculate the statutory payment limitations for USFHP beneficiaries and that these errors had resulted in each of the six plans being overpaid millions of dollars a year over a multi-year period, and collectively the six plans having been overpaid around $300 million. 

Instead of informing the government of the overpayments, the complaint alleges, the six plans took steps to conceal the overpayments from the government and continued to submit invoices at the inflated rate. 

In the same press release, DOJ also announced that it had reached a $780,000 ability-to-pay settlement with Kennell & Associates, the actuarial consultant who had made the errors in the rate-setting methodology that caused the USFHP rates to be overstated and, after becoming aware of the errors, is alleged to have failed to inform the government.    

Because Monday of this week, was April Fool’s Day, we consider how Martin’s Point is alleged to have defrauded two different federal healthcare programs in two successive complaints initiated seriatim by three different whistleblowers. I’m reminded of the adage, “Fool me once, shame on you, fool me twice, shame on me.”

Somehow, after reading the DOJ’s recent 94-page complaint in intervention, I have a feeling that DOJ is growing tired of tomfoolery and may just get the last laugh.    

Finally, in more risk adjustment news, on March 15, the Medicare Payment Advisory Commission (MedPAC) issued its annual report to Congress on the Medicare Fee for Service (FFS) payment systems, the Part C Medicare Advantage program, and Part D prescription drug program. 

In its 561-page report, one statistic stood out and has captured the attention of several journalists and commentators.  The quote with the eye-catching statistic reads: “We estimate that Medicare spends approximately 22 percent more for MA (Medicare Advantage) enrollees than it would spend if those beneficiaries were enrolled in FFS Medicare, a difference that translates into a projected $83 billion in 2024.” 

MedPac makes clear that the 22 percent estimate was arrived at after they had accounted for “favorable selection” and “coding intensity,” so it can’t be explained away by assuming that MA beneficiaries are sicker than people in traditional FFS Medicare. 

While some people are scratching their heads on why healthcare provided under MA plans costs taxpayers 22percent more, many people, myself included, point to the ever-increasing group of False Claims Act cases in which whistleblowers have alleged that many of the major health plans, as well as healthcare providers and vendors, have engaged in systemic risk adjustment fraud.

About the Author

Mary Inman is a partner and co-founder of Whistleblower Partners LLP, a law firm dedicated to representing whistleblowers under the various U.S. whistleblower reward programs.  Mary and her colleagues have pioneered a series of successful whistleblower cases against prominent health insurers, hospitals, provider groups, and vendors under the False Claims Act alleging manipulation of the risk scores of Medicare Advantage patients.  Mary is a recognized expert and frequent author, commentator, and speaker on frauds in the healthcare industry, particularly those exposed by whistleblowers.  Mary is a member of the RACmonitor editorial board and a popular panelist on Monitor Monday. 

Contact the Author:

Mary Inman Esq.