Complete Health to Pay $14.1 Million Over Alleged Medicare Advantage Risk Score Inflation

Key Takeaways

• $14.1 Million False Claims Act Settlement: Complete Health Partners Holdings agreed to pay $14.1 million to resolve allegations that it caused unsupported Medicare Advantage diagnosis codes to be submitted between 2020 and 2023. The settlement does not include an admission of liability.
• Risk Scores at the Center of the Case: The Justice Department alleged Complete Health improperly increased Medicare Advantage risk-adjusted payments by submitting diagnosis codes within HCC 55 and HCC 59 that were not clinically valid, adequately supported, or considered in patient care.
• Financial Incentives Scrutinized: According to the government, Complete Health's risk-sharing contracts allowed it to receive a percentage of CMS payments made to Medicare Advantage organizations, creating an incentive to increase beneficiaries' risk scores.
• Coding Practices Under Fire: Prosecutors alleged the company issued incorrect coding guidance and encouraged physicians to add diagnosis codes that lacked sufficient clinical support in beneficiaries' medical records.
• Continued Focus on Medicare Advantage Enforcement: The settlement reflects the Justice Department's ongoing use of the False Claims Act to challenge alleged manipulation of Medicare Advantage risk adjustment and diagnosis coding.

Deep Dive

The Justice Department says Complete Health Partners Holdings crossed the line between documenting illness and manufacturing reimbursement. The Jacksonville, Florida-based management services organization has agreed to pay $14.1 million to resolve allegations that it caused false diagnosis codes to be submitted to inflate Medicare Advantage payments between 2020 and 2023. The settlement resolves claims brought under the False Claims Act and does not include an admission of liability.

According to the government, Complete Health's financial arrangements made those diagnosis codes especially valuable. The company manages, owns, or operates affiliated physician groups in Florida, Alabama, and Colorado. Under contracts with Medicare Advantage organizations, Complete Health received a percentage of the payments those insurers collected from CMS. Every increase in a patient's risk score had the potential to increase not only the insurer's reimbursement, but also Complete Health's own compensation.

Federal prosecutors contend that the company distributed incorrect coding guidance to physicians and coders for diagnoses within Hierarchical Condition Category (HCC) 55, covering drug and alcohol dependence, and HCC 59, covering major depressive, bipolar, and paranoid disorders.

The government's allegations go beyond coding mistakes. According to the settlement, Complete Health coders reviewed beneficiaries' medical records looking for additional chronic conditions that could be reported. They then prompted physicians to add diagnosis codes, including those within HCC 55 and HCC 59, even when the government says the diagnoses were unsupported by the medical records or lacked clinical justification.

Doctors ultimately added those diagnoses, according to the Justice Department, resulting in higher payments from CMS to Medicare Advantage plans. Because Complete Health's contracts entitled it to a share of those payments, the government alleges the company also benefited financially from the increased reimbursement.

The settlement specifically resolves allegations that diagnosis codes submitted during the four-year period were not clinically valid, were not adequately supported by beneficiaries' medical records, or were not considered in the care, management, or treatment of those patients.

The mechanics matter because Medicare Advantage's payment system depends on them. CMS does not pay plans based solely on enrollment. It adjusts monthly payments using its Hierarchical Condition Category model, which estimates expected healthcare costs from providers' reported diagnoses. The model is designed to direct more money toward beneficiaries with greater medical needs. It also assumes those diagnoses accurately reflect conditions that are documented and treated.

That assumption has become one of the government's principal enforcement priorities.

"As the Medicare Advantage program continues to grow, providers who participate in the program must be held to account when they attempt to improperly profit at the taxpayer's expense," Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division said in announcing the settlement.

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