Anthem must face U.S. government lawsuit alleging Medicare Advantage fraud

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The logo for health insurance provider, Anthem, is displayed on a screen on the floor at the NYSE in New York

By Jonathan Stempel

NEW YORK (Reuters) – A federal judge ordered Anthem Inc to face a U.S. government lawsuit claiming it submitted inaccurate diagnosis data, enabling the health insurer to fraudulently collect tens of millions of dollars in annual overpayments from Medicare.

In a decision released on Monday, U.S. District Judge Andrew Carter in Manhattan said the total alleged overpayment to Anthem appeared to be well over $100 million, making the government’s financial costs “substantial and not merely administrative.”

A lawyer for Anthem declined to comment. The Indianapolis-based insurer did not immediately respond to a request for comment.

The Department of Justice lawsuit filed in March 2020 stemmed from Anthem’s operation of dozens of Medicare Part C plans, also known as Medicare Advantage, a privatized system that insures Americans who opt out of traditional Medicare.

Anthem was accused of not checking the accuracy of diagnosis codes it submitted when seeking reimbursements between early 2014 and early 2018, because deleting invalid codes would have reduced revenue.

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One company executive was quoted in 2016 as saying Anthem viewed its “retrospective chart review,” which supplemented codes it had already collected from doctors, as a “cash cow.”

The Justice Department sued Anthem under the federal False Claims Act, which prohibits submitting false payment claims, and sought civil fines and triple damages. Carter’s decision is dated Sept. 30.

Anthem’s case is one of multiple Justice Department civil lawsuits against companies that participate in Medicare Advantage.

The government watchdog MedPac said excess Medicare Advantage billing linked to what it calls “coding intensity” reached $12 billion in 2020.

Enrollment in Medicare Advantage has doubled since 2013 to about 28.7 million, or approximately 49% of all eligible Medicare beneficiaries, MedPac said in July.

The case is U.S. v. Anthem Inc, U.S. District Court, Southern District of New York, No. 20-02593.

(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy)