A Florida health insurer and one of its former executives will pay $32.5 million to settle a whistleblower’s lawsuit alleging that the company defrauded the federal government.
According to the Justice Department, Tampa-based Freedom Health falsified diagnosis codes between 2008 and 2013 to pump up reimbursements for members of its Medicare Advantage plans in Florida, according to a
Miami Herald report. The lawsuit was initiated by whistleblower Darren D. Sewell, the company’s former chief medical officer.
The higher reimbursements, known as “risk adjustments”, are meant to offset the higher costs of treating sicker patients. But the lawsuit claimed that members of Freedom’s Medicare Advantage plan were treated for conditions they didn’t have – or never received additional care, the
Herald reported.
The Justice Department also alleged that Freedom lied to federal regulators about the size and composition of its network of physicians and hospitals in order to expand in Florida and into other states. According to the DOJ, Freedom submitted a directory of hospitals, doctors and specialists who were supposedly in its network – but who, in fact, had never agreed to provide care for Freedom members.
The company will pay a total of $31.7 million to settle two allegations: $16.7 million for the allegation of inflated risk-adjustment claims and $15 million for allegedly inflating its provider network. Freedom’s former chief operating officer, Siddhartha Pagidipati, will pay $750,000 over his alleged role in the company’s plan to expand without an adequate provider network, the
Herald reported.
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