Washington, DC, July 31, 2023—Martin’s Point Health Care Inc., a provider of healthcare in Maine and New Hampshire, agreed to pay $22.48 million to resolve allegations that it violated the federal False Claims Act by knowingly submitting inaccurate diagnosis codes for patients enrolled in the Medicare Advantage Plans it offers. The whistleblower’s lawsuit filed in 2018 by Phillips & Cohen LLP is believed to be the largest settlement in Maine under the False Claims Act.

Under the Medicare Advantage program, also known as the Medicare Part C program, private health-insurance organizations, like Martin’s Point, agree to provide Medicare coverage to Medicare beneficiaries in exchange for a fixed monthly payment from the Centers for Medicare & Medicaid Services (CMS).  Payments vary from patient to patient based, in part, on the health of the patient. In general, the “sicker” the patient, the higher the monthly payment from the government because the cost of caring for the patient is higher. Conversely, the healthier the patient, the lower the monthly payment because the health care costs are lower.

Medicare Advantage plans report the health of its members to CMS by submitting medical diagnosis codes for each patient. CMS uses these diagnosis codes to determine the monthly payment it pays to the plan for that member. If the medical diagnosis codes are not accurate, the CMS monthly payment will not be accurate.

The lawsuit that was settled today alleges that from 2016 to 2019, Martin’s Point knowingly submitted diagnosis codes that were not supported by the medical records – making patients appear sicker than they were – for the purpose of obtaining higher monthly payments from CMS.

“False and unsupported medical diagnoses indicate patients have medical conditions that they don’t really have and, in the Advantage context, cost the government millions of dollars,” said Jeffrey W. Dickstein, a whistleblower attorney and partner at Phillips & Cohen LLP.

“Medicare Advantage programs rely on accurate health information to provide the best healthcare and proper payment from the federal government,” said, Amy L. Easton, a whistleblower attorney and partner at Phillips & Cohen LLP. “Inaccurate diagnosis codes distort both the delivery of healthcare and government payment for that healthcare.”

The whistleblower, Alicia Wilbur, was the Manager of Medicare Risk Adjustment Operations at Martin’s Point from mid-2016 through late 2017.

Ms. Wilbur and her counsel are grateful for the work of AUSAs John Osborn and James Concannon and Civil Frauds Trial Attorney, Jennifer Koh.

James B. Haddow of the firm Petruccelli, Martin & Haddow, LLP in Portland, Maine was invaluable as local counsel.

The lawsuit was filed under the whistleblower provisions of the False Claims Act and allows private citizens to file “qui tam” lawsuits against companies that are defrauding the government and recover funds on the government’s behalf. Whistleblowers are provided protection against job retaliation under the False Claims Act and given rewards that range from 15% to 25% of the recovery when the government joins the case.

A copy of the complaint can be found here: Martins point complaint 8 2 .