News: Sutter Health, affiliates to pay back $30 million for Medicare Advantage overpayments

Sacramento-based Sutter Health LLC and several affiliates will pay $30 million to settle allegations that they were overpaid after submitting inflated information about the dire health status of Medicare Advantage beneficiaries, the Department of Justice said.

Federal prosecutors allege that Sutter Health and its affiliates submitted unsupported diagnosis codes for patient encounters with beneficiaries. These unsupported diagnosis scores inflated the risk scores of these beneficiaries, resulting in the Medicare Advantage Organization (MAO) plans being overpaid, HealthLeaders Media reported.

Sutter submitted diagnoses to the MAOs for the Medical Advantage (MA) plan enrollees they treated. The MAOs submitted the diagnosis codes to CMS from the beneficiaries' medical encounters, such as office visits and hospital stays. The diagnosis codes were used in CMS' calculation of a risk score for each beneficiary, the DOJ said.  

“Misrepresenting patients' risk results in higher payments and wasted Medicare funds,” said Steven J. Ryan, Special Agent in Charge with the Office of Inspector General for the Department of Health and Human Services.

"With some one-third of people in Medicare now enrolled in managed care Advantage plans, large health systems such as Sutter can expect a thorough investigation of claimed enrollees' health status," Ryan said.    

Editor’s note: This article originally appeared in HealthLeaders Media. To read more about the suit against Sutter, click here.