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Federal lawsuit alleges heath care giant defrauded CMS of more than $100M

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Indianapolis-based health insurance giant Elevance Health, previously Anthem, Inc., will have to face a federal lawsuit alleging it pocketed at least tens of millions of dollars by submitting inaccurate claims to the U.S. Centers for Medicaid & Medicare Services.

The original lawsuit, filed by the U.S. Department of Justice in March 2020, alleges the company did not check diagnosis codes it submitted for reimbursement between early 2014 and 2018 for its Medicare Advantage plans for senior citizens. These plans are run by private insurers like Elevance Health that contract with CMS. Around 28.7 million people — nearly half of all eligible Medicare beneficiaries — are covered under these plans.

Earlier this week, a U.S. district judge in Manhattan ruled the company failed to prove that the lawsuit lacked materiality. Judge Andrew Carter said the financial costs to the government were “substantial” and not “merely administrative” — amounting to more than $100 million.

In a statement to WFYI, Elevance Health said that it complied with federal regulations.

“We are confident that our health plans and associates have complied with Medicare Advantage regulations, including those set forth by the Centers for Medicare & Medicaid Services,” the statement said.

Elevance said the company operated in “good faith” and that CMS should update regulations if the agency wants to “change how it reimburses Medicare Advantage Plans for health services.”

But the lawsuit alleges that when Elevance did a review of diagnosis codes it had submitted to CMS and found that some were not valid, the company did not “make any effort to verify or delete these codes.” In his decision letter dated Sept. 30, Judge Carter said the plaintiff alleges the company was aware of CMS’ requirements to submit diagnosis data.

This story comes from a reporting collaboration that includes the Indianapolis Recorder and Side Effects Public Media, a public health news initiative based at WFYI. Contact Farah at fyousry@wfyi.org. Follow on Twitter: @Farah_Yousrym.

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