Monogram Health Agrees to Pay $2.4 M to Settle False Claims Act Lawsuit

NASHVILLE, Tennessee—Monogram Health Professional Services PC and Monogram Health Inc., headquartered in Tennessee, have agreed to pay $2.4 million to resolve allegations that they violated the False Claims Act by causing the submission of false diagnosis codes to increase payments that they received from the Medicare Advantage program.

The settlement resolves allegations that, during the period from Jan. 1, 2021 through Dec. 31, 2023, Monogram knowingly submitted diagnosis codes within the following four HCCs that were not clinically accurate, not supported by documentation in the beneficiary’s medical records and did not require or affect patient care, treatment or management: HCC 21 (protein-calorie malnutrition), HCC 55 (substance use disorder); HCC 48 (coagulation defects and other specified hematological disorders), and HCC 88 (angina pectoris).

The submission of these diagnosis codes resulted in false claims that inflated the risk scores of the Medicare Advantage beneficiaries, thereby causing the Centers for Medicare & Medicaid Services (CMS) to make higher capitated payments to the MAOs than it would have paid without these diagnosis codes.

Under the Medicare Advantage Program, also known as Medicare Part C, Medicare beneficiaries may opt out of traditional Medicare and enroll in private health plans offered by insurance companies known as Medicare Advantage Organizations, or MAOs.

The CMS pays the MAOs a fixed monthly amount for each Medicare beneficiary enrolled in their plans. CMS adjusts these monthly payments to account for various “risk” factors that affect expected health expenditures for the beneficiary.

In general, CMS pays MAOs more for sicker beneficiaries expected to incur higher healthcare costs and less for healthier beneficiaries expected to incur lower costs. To calculate the payment amounts, CMS uses a health-based risk adjustment model—the Hierarchical Conditions Category (HCC) model—that considers diagnoses reported by healthcare providers.

In general, the more severe the diagnosis or costly the associated treatment, the higher the risk score and the higher the corresponding payments to the MAO. The diagnoses must be supported by the medical record of a face-to-face visit between a patient and a provider, and for outpatient visits, must have required or affected patient care, treatment or management at the visit.

Monogram provides in-home care and related services to Medicare beneficiaries enrolled in MA plans pursuant to contracts with certain MAOs. Under these contracts, Monogram was eligible to be paid more by the MAOs if the beneficiaries in its care had higher risk scores because the MAO received higher payments from CMS for those beneficiaries. These risk sharing arrangements gave Monogram a financial incentive to submit additional diagnosis codes to increase its patients’ risk scores and the corresponding payments made by CMS.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Ajay Gupta, a physician formerly employed by Monogram. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Gupta will receive approximately $380,000 as his share of the recovery in this case.