Kaiser Permanente Affiliates Settle Whistleblower Fraud Claims for $581 Million

Affiliates of Kaiser Permanente recently agreed to a $581 million settlement with the federal government, resolving multiple whistleblower lawsuits alleging "risk adjustment" fraud and other misconduct. The cases primarily focused on the companies' Medicare Advantage (MA) contracts, where government payments are adjusted based on beneficiaries' health status. Whistleblowers claimed that Kaiser affiliates submitted inaccurate diagnostic codes, leading to inflated government payments for services.

One of the key lawsuits, filed in 2014 by Phillips & Cohen on behalf of a whistleblower, utilized the False Claims Act's qui tam provisions. This litigation highlighted systemic errors in diagnosis coding, such as misrepresenting patients with a history of cancer as having active cancer, which significantly increased government payouts. George Collins, senior counsel and evidentiary data scientist at Phillips & Cohen, emphasized the critical role of whistleblowers in recovering funds that should be directed towards patient care and affordability.

Collins, whose practice specializes in data-centric and software-centric fraud cases, leveraged his expertise in programming languages and analytical methods, including machine learning, to uncover the alleged fraud. His work involves analyzing massive, complex datasets to identify patterns of misconduct. This settlement underscores the growing importance of data analysis in uncovering sophisticated healthcare fraud schemes and holding large corporations accountable for their billing practices.