A New York health insurer and one of its former executives have reached a settlement with the Justice Department, agreeing to pay up to $100 million to resolve allegations of Medicare fraud. The government’s lawsuit, filed in 2021, accused Independent Health, its subsidiary DxID, and former CEO Betsy Gaffney of engaging in a scheme to inflate the severity of Medicare Advantage patients’ conditions in order to receive higher reimbursement from the government.
According to the lawsuit, the defendants systematically reviewed patients’ medical records for profitable diagnoses and pressured doctors to approve these diagnoses, resulting in Independent Health receiving millions of dollars more in government payments than it was entitled to. This case stands out as the first time a lawsuit targeting Medicare Advantage fraud has also implicated the vendor involved in the fraudulent scheme.
The government has been cracking down on Medicare Advantage fraud, holding insurers accountable for submitting false claims and manipulating patient data to increase their reimbursement. This settlement serves as a warning to other insurers and healthcare providers that engaging in fraudulent practices will not go unpunished.
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