Medicare Advantage company, former CEO pay $32.5 million to settle false claims allegations

by Ben Vernia | June 1st, 2017

On May 30, the Department of Justice announced that Tampa, Florida-based Freedom Health, related companies and its former CEO have agreed to pay a combined $32.5 million to settle civil allegations, originally brought by a whistleblower, that the company submitted false diagnosis codes to inflate the government’s reimbursement of Medicare Part C beneficiaries. According to DOJ’s press release:

Justice News

Department of Justice
Office of Public Affairs

Tuesday, May 30, 2017

Medicare Advantage Organization and Former Chief Operating Officer to Pay $32.5 Million to Settle False Claims Act Allegations

Freedom Health Inc., a Tampa, Florida-based provider of managed care services, and its related corporate entities (collectively “Freedom Health”), agreed to pay $31,695,593 to resolve allegations that they violated the False Claims Act by engaging in illegal schemes to maximize their payment from the government in connection with their Medicare Advantage plans, the Justice Department announced today. In addition, the former Chief Operating Officer (COO) of Freedom Health Siddhartha Pagidipati, has agreed to pay $750,000 to resolve his alleged role in one of these schemes.

*   *   *The government alleged that Freedom Health submitted or caused others to submit unsupported diagnosis codes to CMS, which resulted in inflated reimbursements from 2008 to 2013 in connection with two of their Medicare Advantage plans operating in Florida. It also alleged that Freedom Health made material misrepresentations to CMS regarding the scope and content of its network of providers (physicians, specialists and hospitals) in its application to CMS in 2008 to expand in 2009 into new counties in Florida and in other states. The government’s settlement with Mr. Pagidipati resolves his alleged role in this latter scheme.

*   *   *

The government wrote that the share to be paid to the whistleblower, a former Freedom Health employee, has not yet been determined.

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