As Ross and her colleagues reviewed the submissions, they found DxID was adding diagnoses that doctors hadn’t made. “Coders are not allowed to diagnose anything,” Ross said. “That’s for doctors.”
Despite Ross’s protests, Group Health adopted most of the coding policies DxID proposed, Ross and the Justice Department allege. Her managers spurned her, she said, and eventually brought in the psychologist. Ross’s attorney, Mary Inman, a partner at whistleblower law firm Constantine Cannon, said Ross’s experience fits a pattern of tactics used to isolate corporate dissenters. “This is where you get the whistleblower to start to doubt herself,” Inman said. “That’s part of the corporate playbook that we see in these cases.”
Ross wasn’t dissuaded. In April 2012, after 14 years in a job she loved, she filed her complaint in federal court for the Western District of New York, where DxID was based. “The company that I had known to be ethical all of a sudden wasn’t,” she said. “They didn’t care about whether or not it was compliant. At least in my eyes, they were more concerned about what Betsy Gaffney was hanging out in front of them, which was millions and millions of dollars.”
Attorneys for Gaffney didn’t respond to multiple requests for comment. In a statement to the Buffalo News last year, they said she was “unfortunate victim of an ancient lawsuit premised on inaccurate allegations.” In legal filings seeking to dismiss the case, the defendants characterized the dispute as “good faith disagreements over objectively ambiguous coding criteria” and said that the allegations from Ross and the Department of Justice don’t meet the standards of a False Claims Act claim.
Whistleblowers file their initial complaints under seal to give the government time to investigate and decide whether to proceed. In Ross’s case, it lasted years. She left Group Health the year after she filed her complaint and moved on to other jobs while her case sat sealed on the docket.
Mostly unknown to Ross, other whistleblowers were coming forward with similar accounts at other companies, and federal investigators were building cases of their own. Both targeted some of the largest companies in the industry, which increasingly relied on Medicare Advantage as a source of profitable growth.
In 2017, the Justice Department intervened in a case against UnitedHealth, the largest Medicare Advantage provider. It sued Anthem in 2020. A whistleblower suit against Cigna was also unsealed that year. The companies are fighting the cases and have disputed allegations of wrongdoing. CVS Health and Humana have also both disclosed investigations into their risk adjustment practices and said they’re cooperating with the probes. UnitedHealth and CVS declined to comment for this story. Representatives for Anthem, Cigna and Humana didn’t respond to requests for comment. The Department of Justice declined to comment.
In 2017, Group Health was acquired by Kaiser Permanente, the giant California-based HMO. Ross’s own suit was unsealed in 2019, when the U.S. initially said it would not intervene but would keep investigating.
Kaiser Permanente’s Washington state subsidiary denied Ross’s allegations. Without admitting liability, the health plan resolved the lawsuit in 2020 in a settlement for $6.3 million — about one-fifth of the revenue increase Ross attributed to the practices in two years of its engagement with DxID. Ross was awarded $1.5 million, with the rest recovered by the government.
Kaiser Permanente spokesman Marc Brown said in an email that Group Health “submitted its data in good faith and in reliance on recommendations by DxID, its contracted risk adjustment vendor, which purported to be an expert in this area.”
DxID ceased operations last summer. But the U.S. attorney in the Western District of New York is pursuing the civil fraud claims Ross initiated against the vendor, its parent company Independent Health, and Gaffney as an individual defendant.
Independent Health and DxID deny wrongdoing and have moved to dismiss the lawsuit. “We believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately,” Independent Health said in a statement. “Independent Health and DxID diligently navigate complex and vague coding criteria to ensure that all diagnosis and billing codes properly reflect our members’ medical conditions and are supported with documentation in the members’ medical records.” The company also said its plans received high ratings from Medicare.
Last summer, the Department of Justice intervened in six other cases against Kaiser Permanente filed by separate whistleblowers alleging that it defrauded Medicare through inflated risk codes. The health system says it will fight the suits and defended its audit record with Medicare. “Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance,” Kaiser Permanente said. The company declined interview requests.
The cases could take years to resolve. Ross, who struggled initially with her decision to come forward, has been heartened by the number of counterparts across the industry who raised similar concerns. “It took a long time for the government to really understand what was happening to them in this space,” she said.
This article was provided by Bloomberg News.