Sutter Health and Affiliates Agreed to Pay $30 Million to Resolve Allegations of Medicare Advantage Fraud

California-based Sutter Health LLC and four of its affiliates will pay $30 million to resolve allegations of Medicare fraud related to the Medicare Advantage program. The Medicare Advantage providers allegedly misrepresented the health status of the plan’s beneficiaries in order to increase billings.  

Sutter Health and Affiliates Agreed to Pay $30 Million to Resolve Allegations of Medicare Advantage Fraud

Medicare Advantage is a system that provides per-person healthcare benefits to enrolled individuals based on certain risk parameters. By portraying beneficiaries to have higher risk scores, Sutter Health and its affiliates were able to overbill the government healthcare program.  

According to the complaint, Sutter and its co-defendants falsely submitted severe diagnosis codes for a large number of Medicare Advantage beneficiaries. This resulted in an overpayment on the part of Medicare.

The complaint stated that Sutter serviced nearly 48,000 Medicare Advantage enrollees and was likely liable for “hundreds of millions of dollars” in restitution, fines, and damages.  

For Assistant Attorney General Jody Hunt, “The Medicare Advantage Program provides benefits to a significant portion of federal health care beneficiaries. The Department of Justice will help ensure that accurate information is supplied to the Medicare Advantage Program by plans and providers, and to pursue appropriate remedies when it is not.”

Sutter Health and another one of its affiliates are defendants in a separate suit, also relating to the submission of unsupported diagnosis codes and related overbilling. In that case, the company’s officials tried to attribute the overbilling to reported inconsistencies between Medicare Advantage and other areas of Medicare under the Affordable Care Act.

The defense was based on a ruling from September 2018. The government will now have to prove that California-based company and its co-defendant, Palo Alto Medical Foundation, knowingly submitted the diagnosis codes which resulted in overpayment.

A spokesperson for the Office of the Inspector General emphasized the importance of holding fraudsters like Sutter Health accountable. “Misrepresenting patients’ risk results in higher payments and wasted Medicare funds. With some one-third of people in Medicare now enrolled in managed care Advantage plans, large health systems such as Sutter can expect a thorough investigation of claimed enrollees’ health status,” he commented.

Sutter Health officials said in a statement that the company is "aware of the matter” and takes “the complaint seriously.” Once more, they attributed the allegations to “an area of law that is currently unsettled and the subject of ongoing litigation in multiple jurisdictions.” “We intend to vigorously defend ourselves against the allegations in the complaint," they concluded.

If you know of a healthcare provider or company that is cheating its patients, call us. We can assist you in putting an end to the fraud and help you receive a large cash reward for your trouble. Connect with us 888.742.7248 or ONLINE.


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