Medicare Advantage Fraud Charges Filed Against HealthSun Executive

November 27, 2023

Author: Erica Blachman Hitchings, Kelly Shivery,

The Department of Justice recently announced charges against a former executive at HealthSun Health Plans Inc. (HealthSun).  HealthSun, a subsidiary of Elevance Health, Inc. (Elevance), is a Medicare Advantage organization, also known as a Part C plan, operating in South Florida. Kenia Valle (Valle), HealthSun’s former Director of Medicare Risk Adjustment Analytics, is facing charges of Medicare Advantage fraud.

How Medicare Calculates Payments to Medicare Advantage Plans (Part C Plans)

Medicare Advantage plans (MA Plans), like HealthSun and Elevance, are private insurers that provide Medicare-covered benefits to Medicare-eligible beneficiaries. The Centers for Medicare and Medicaid Services (CMS) pays MA Plans a fixed (also known as capitated) amount for each enrolled beneficiary. To ensure the payments accurately reflect the expected cost of providing health care to each beneficiary, CMS uses a process called “risk adjustment” to adjust payments based on the health condition of its enrollees.  In plain terms, the sicker the MA Plan’s enrollees, the higher the capitated payments the MA Plans receive.

Former Executive of Part C Plan Faces Medicare Advantage Fraud Charges

The alleged scheme involved submitting false and fraudulent information to CMS to inflate the amount that HealthSun received for certain Medicare Advantage enrollees.  Valle and her co-conspirators are accused of knowingly submitting false information about chronic ailments that beneficiaries did not have.  Further, non-healthcare providers, such as medical billing coders, allegedly added inaccurate data to patient health records.

Specifically,  the defendants entered diagnoses into medical records based on improper diagnostic tests.  In addition, they wrongfully accessed electronic medical records (EMR) using ill-gotten login credentials assigned to certain physicians. These practices resulted in the submission of tens of thousands of false and fraudulent diagnoses codes to CMS resulting in millions of dollars in overpayments to HealthSun and its parent, Elevance.

As a result, the DOJ charged Valle with one count of conspiracy to commit health care fraud and wire fraud, two counts of wire fraud, and three counts of major fraud. If convicted, Valle faces a maximum penalty of 20 years in prison on the conspiracy count and on each wire fraud count. For each count of major fraud, Valle faces a maximum penalty of 10 years in prison.

HealthSun’s Self-Disclosure and Cooperation with the Government’s Investigation

Upon discovery of the misconduct, HealthSun voluntarily disclosed the Medicare Advantage fraud to the DOJ.  The DOJ considered the MA Plans’ self-disclosure and subsequent cooperation when deciding whether to lodge charges against the entity. Ultimately, the DOJ decided not to prosecute HealthSun. HealthSun will also repay approximately $53 million in overpayments to CMS.

Fighting Medicare Advantage Fraud is a Government Priority

This case highlights the importance of robust enforcement against healthcare fraud and the need for organizations to maintain ethical standards.  WLC partner Erica Blachman Hitchings investigated Medicare Advantage fraud matters when she was a government prosecutor, and was asked to share her perspective by journalists covering the HealthSun settlement.

Yet another Medicare Advantage plan is found to have submitted false diagnosis codes for its beneficiaries in order to increase their bottom line. HealthSun avoided prosecution due to its voluntary disclosure of the fraud to the government. More companies need to own up to fraudulent conduct and, if they do not, whistleblowers need to hold them to account. Curtailing Medicare Advantage fraud remains a high priority for the government, and there is much work left to be done.

Erica Blachman Hitchings, WLC partner and health care fraud prosecutor, said to The Capitol Forum.

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