Suit: Medicare Advantage plans in PR allegedly overbilled >$1,000 million

On June 12, 2014, CPI published a report by Fred Schulte (Center for Public Integrity / NBC News): Josh Valdez, a former federal health executive, sued under whistleblower protections in federal court alleging that Medicare Advantage plans MMM Healthcare and PMC Medicare Choice —then under Aveta Inc.— overbilled Medicare between $300 million and $350 million a year from 2007 to 2010 (“rampant fraud”).

Valdez says Richard Shinto fired him in retaliation for opposing the practice. The suit, filed in Santa Ana (CA) in April 2011, remained sealed until February 2014 and was pending. The plans called him a “disgruntled former employee” and denied the allegations. The federal government allegedly paid them between $1 billion and $1.8 billion a year (2007–2010); up to $350 million a year would have been “inflated,” Valdez claimed, via risk scores based on unverified diagnoses.

He alleges an internal audit (May 2010) failed to justify scores for about 1/3 of patients, and that in July 2010 COO Penelope Kokkinides estimated risk at ~20% of Medicare pay (~$350 million/year) and said 2007 was “particularly atrocious.” CMS, per the note, relies on self-certification by ~700 plans; there was no evidence of a CMS audit of those two insurers. Valdez took the matter to federal prosecutors in the Central District of California (Mar 2011); the prior January prosecutors said the investigation “has not concluded.”

A whistleblower suit and an open investigation ≠ conviction. An alleged embezzlement ≠ adjudicated theft.

Source: Centro de Periodismo Investigativo. https://periodismoinvestigativo.com/2014/06/aseguradora-de-puerto-rico-desfalca-al-medicare-por-mas-de-1000-millones-segun-demanda/