On October 26, 2023, the Department of Justice (“DOJ”) announced that a Miami federal grand jury returned an indictment charging a Medicare Advantage Organization’s (“MAO”) former director of Medicare risk adjustment analytics with six counts of criminal fraud. DOJ alleged that the MAO received more than $53 million in overpayments from the Centers for Medicare & Medicaid Services (“CMS”) due to false diagnoses submitted on reimbursement claims for beneficiaries enrolled in the MAO’s plans.
What’s perhaps most notable about this matter is that DOJ declined to prosecute the MAO because of the MAO’s significant and timely self-disclosure, cooperation, and remediation efforts, in addition to the MAO’s agreement to repay CMS the full amount of the estimated overpayments.
Decision reinforces efforts to reward cooperation
Consistent with its recent pronouncements and policy revisions, DOJ’s decision in this matter affirms its commitment to rewarding corporate cooperation in criminal investigations and its focus on individual accountability for corporate wrongdoing.
Meanwhile, similar trends appear to be emerging on the civil side. Over the past few months, DOJ has entered into False Claims Act settlement agreements with an orthopedic device company, a billing company for diagnostic laboratories, an information technology services company, and a specialty pharmacy (among others) that have included provisions crediting and describing the settling parties’ cooperative efforts.
Through these recent developments, DOJ appears to be signaling that corporate cooperation carries explicit benefits. Healthcare companies ought to take note and ensure they maintain robust compliance programs that allow them to early identify, disclose, and redress misconduct.
Reed Smith will continue to follow developments related to Medicare fraud and corporate cooperation credit. If you have any questions, please reach out to the authors of this post or the health care lawyers at Reed Smith.