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Sutter Health to Pay $90 Million in Largest Medicare Advantage Fraud Settlement

One of the largest US health care providers, Sutter Health, has agreed to pay $90 million to settle allegations of violating the False Claims Act (FCA) resolving the 2015 whistleblower suit. California-based hospital operator was accused of knowingly submitting inaccurate information about their patients’ health status enrolled in Sutter Health’s contracted Medicare Advantage Plans stated the U.S. Department of Justice.

The settlement, which is believed to be the largest FCA case against a hospital system over Medicare Advantage, was made on August 30, 2021, and once again underlined the benefits of whistleblowing in the healthcare sector.

What Alleged Fraud did Sutter Health Commit?

The whistleblower lawsuit was originally filed in 2015 by a former employee of Sutter Health. The case alleged that starting from 2010 Sutter Health and its medical practice foundation affiliates knowingly submitted unsupported diagnosis codes to its contracted Medicare Advantage Plans to increase its reimbursement for provided services.

Sutter Health’s contracted Medicare Advantage Plans received larger payments by making patients appear sicker than they actually were. Once aware of the unsupported codes, the healthcare service provider failed to take sufficient action which led to the system abuse.

Why is the Sutter Health Whistleblowing Case Important for the Medicare Program?

Whistleblowing is an essential tool for the government in going after misconduct and therefore protecting the public, especially when it comes to the Medicare program. Sutter Health’s case sets an important example of whistleblowers teaming up with lawyers and government officials to fight against fraud in the healthcare sector.

The “result sends a clear message that we will hold healthcare providers responsible if they knowingly provide or fail to correct information that is untruthful,” said the Justice Department’s Civil Division’s Deputy Assistant Attorney General Sarah Harrington.

In announcing the settlement, the Department of Justice representatives underlined their ongoing efforts to fight fraud within the Medicare Advantage program. In addition to the payment, Sutter Health signed a five-year corporate integrity agreement, which calls for a centralized risk assessment program. Under such a program the healthcare provider has to hire an outside organization to review its patient diagnostic data each year.

What Compensation does Sutter Health Case Whistleblower Get?

Often, the whistleblower is expected to receive 15% to 25% of the recovered funds if the government joins the case, or 25% to 30% of recovery if the government decides not to take on the case.

In the Sutter Health case, according to the media reports, the whistleblower is expected to get 15% to 30% of the settlement under the FCA, while the exact share is yet to be determined.

At Khurana Law Firm, P.C., experienced Medicare whistleblower lawyers support the decision to come forward to report abuse and fraud in the Medicare Advantage program.

Contact us today for a free, confidential consultation at (888) 335-5107

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