On August 8, 2019, the DOJ announced a $5 million settlement with Beaver Medical Group L.P. (Beaver) and one of its physicians, Dr. Sherif Khalil, to resolve FCA allegations. Dr. David Nutter, a former employee, brought a qui tam action against Beaver and Dr. Khalil alleging that the group falsely diagnosed Medicare Advantage (MA) enrollees and submitted false diagnoses to the MA plan that inflated the patients’ risk adjustment factor scores. The MA plans then allegedly submitted incorrect risk adjustment data to CMS and, in turn, CMS paid the MA plan higher Medicare Part C capitation payments causing the group to receive more reimbursement for its services provided to MA enrollees.

Over the past few years, MA plans and providers have come under increased government scrutiny. This is one of several settlements demonstrating the government’s effort to pursue more MA-related FCA enforcement actions. The government has continued to focus both on MA plans and providers. Last spring, the DOJ issued a civil investigative demand to Anthem asking about its MA risk adjustment program and intervened in an ongoing FCA case against UnitedHealth Group Inc. in 2017. Several providers have also been the subject of FCA allegations that they have submitted unsupported diagnosis codes to MA plans that subsequently inflated risk adjustment scores.