July 3, 2020

The Department of Justice U.S. Attorney’s Office Southern District of New York announced on March 27, 2020 that the United States filed a civil fraud lawsuit against ANTHEM, INC. (“ANTHEM”), alleging that ANTHEM falsely certified the accuracy of the diagnosis data it submitted to the Centers for Medicare and Medicaid Services (“CMS”) for risk-adjustment purposes under Medicare Part C and knowingly failed to delete inaccurate diagnosis codes, which caused CMS to calculate the risk-adjustment payments to ANTHEM based on inaccurate, and inflated, diagnosis information, and thereby enabled ANTHEM to obtain millions of dollars in Medicare funds to which it was not entitled.

Medicare Part C, also known as Medicare Advantage, provides health insurance coverage for tens of millions of Americans who opt out of traditional Medicare. Under Medicare Part C, Medicare Advantage Organizations (“MAOs”), typically private insurers like ANTHEM, provide coverage for Medicare beneficiaries. In return, MAOs receive capitated payments from CMS based on the patients’ medical conditions and demographic factors. More specifically, MAOs like ANTHEM submit diagnosis data, typically passed along from beneficiaries’ healthcare providers, to CMS. CMS then uses that diagnosis data, in conjunction with demographic factors, to calculate a “risk score” for each beneficiary and, in turn, the amount of the capitated payment that the MAO will receive for covering that beneficiary.

The United States alleges in its Complaint that ANTHEM, as one of the nation’s largest MAOs, operated dozens of Medicare Part C plans, including the Empire MediBlue plan in New York. To supplement its collection of diagnosis codes besides what it received from healthcare providers, ANTHEM implemented a “retrospective chart review” program using a vendor called Medi-Connect. Specifically, ANTHEM paid Medi-Connect to collect medical records from healthcare providers corresponding to services they rendered to ANTHEM’s Part C beneficiaries and then review those records to identify all diagnosis codes supported by the medical records. ANTHEM then submitted to CMS any diagnosis codes identified by Medi-Connect that ANTHEM had not already submitted to CMS based on what providers initially reported.

The United States’ Complaint further alleges that when ANTHEM asked healthcare providers to provide records to Medi-Connect, ANTHEM characterized its chart review program as an “oversight activity” that would “help ensure that the [diagnosis] codes have been reported accurately.” In fact, however, ANTHEM did not use the information it received from Medi-Connect to check the accuracy of diagnosis codes it had submitted to CMS. Specifically, when Medi-Connect’s review did not validate diagnosis codes that ANTHEM previously submitted to CMS, ANTHEM did not make any effort to verify or delete those codes.

According to the Complaint, ANTHEM did not do so because deleting invalid diagnosis codes would have substantially reduced the additional revenue the chart review program generated for ANTHEM, which frequently exceeded $100 million per year. Instead, ANTHEM treated its chart review program solely as a tool for revenue enhancement and viewed it as ANTHEM’s “cash cow.”

As alleged in the Complaint, ANTHEM not only knowingly failed to delete diagnosis codes shown by its chart review program to be unsupported by the medical records, but also repeatedly made false statements to CMS. Specifically, ANTHEM made false annual attestations to CMS certifying that its risk-adjustment data submissions were “accurate” according to its “best knowledge, information and belief.” ANTHEM also falsely told CMS that it would “research and correct” risk adjustment data discrepancies. As result of its false statements and its failure to delete inaccurate diagnosis codes, ANTHEM improperly obtained or retained millions of dollars in payments from CMS to which it was not entitled, in violation of the False Claims Act.


If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.

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