Medical Loss Ratio (MLR) fraud occurs when plans knowingly misrepresent a proportion of funds spent on patient care and quality improvement measures as opposed to administrative expenses and profits. In this article, we take a deeper dive into MLR fraud and how it impacts our healthcare system.

What is Medical Loss Ratio?

The Affordable Care Act (ACA) requires managed care insurance plans spend a minimum proportion of premium revenue on patient care and quality improvement initiatives in order to limit the amount that can be allocated towards administrative expenses and profits. This is to ensure that taxpayer dollars are being used for healthcare rather than as extra income for insurance companies. Unfortunately, some plans commit fraud by falsely reporting the amount of money spent on patient care and quality improvement.

Identifying MLR Fraud

MLR fraud can be difficult to identify because it can take so many forms. Here’s a look at some common examples:

• Falsely classifying administrative expenses as claims-related expenses.
• Hiding or misallocating revenue from contracts.
• Making excessive or duplicate payments to providers to increase medical services spending.
• Paying provider claims that should have been denied under Medicare rules.
• Making MLR look higher than it is by reporting false information regarding profits or medical expenses to the government.

Reporting MLR Fraud

Whistleblowers are essential to detecting and reporting MLR fraud. They can help protect and bring justice to the healthcare system by providing information on the complicated, hidden conduct that managed care organizations use to defraud the government. For example, in 2012, the government ordered Florida-based health plan company, WellCare, to pay $137.5 million to resolve four lawsuits alleging violations of the False Claims Act after a former employee secretly recorded WellCare executives discussing ways to double bill for patient services in order to avoid returning money to Medicaid and other programs in various states. As a result, the whistleblower received an award of $20.75 million for helping bring justice to the healthcare system.

Blowing the Whistle on MLR Fraud

Like other types of fraud in managed care insurance, MLR fraud steals money from American taxpayers and the millions you rely on government health programs for care. This is why whistleblowers play such an important role in the fight against fraud.

If you are considering blowing the whistle, experienced healthcare fraud attorneys can help answer your questions and guide you through an otherwise arduous situation and work to earn you the monetary rewards you deserve.

Our goal at DJO is to expose fraud wherever and whenever possible. We work with individuals to gain information, build a case, and fight for taxpayers’ justice. In doing so, we can protect the vulnerable and make the world a safer place.

With decades of combined whistleblower experience and more than 200 cases investigated and filed, our team has been involved directly with recouping hundreds of millions of dollars for US taxpayers. We firmly believe in doing what is right and will work alongside you every step of the way in support, as together, we deliver justice.

If you suspect fraud in your organization, please contact us. DJO is comprised of a highly experienced team of whistleblower experts, lawyers, and even former whistleblowers, who strive to deliver the highest monetary reward for brave individuals who have valuable information that can expose fraud. If a whistleblower’s lawsuit is successful, the reward can be up to 25% of the funds recovered. The False Claims Act also offers whistleblowers protection against job retaliation or wrongful termination.

Do you have valuable information that can help bring fraud to light? Speak to our experts today.

Medicare Advantage is a type of health insurance plan offered by private companies contracted by the government. Also known as Medicare Part C, Medicare Advantage was designed to incentivize health insurers to develop innovative ways to improve care while decreasing costs. However, a report by the New York Times shows many of the large insurers that offer these plans have been accused of fraud. In this article, we take a more in-depth look into Medicare Advantage fraud and the role whistleblowers play in exposing it.

Medicare Advantage Fraud on the Rise

The government provides set payments to Medicare Advantage insurers for every enrollee, with additional payments for patients with more health needs. However, many major insurers have been accused of exploiting the system in order to collect more money from the government. Federal audits released late last year reveal widespread overcharges and other errors in payments to Medicare Advantage, with some plans overbilling the government more than $1,000 per patient a year on average. Now, a program that was designed to help lower healthcare spending has become more expensive than the traditional government program it was supposed to improve. To highlight the high cost and importance of exposing Medicare Advantage fraud, let’s take a look at some notable cases.

Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program

In August of 2021, the government announced a $90 million False Claims Act settlement with California-based healthcare services provider Sutter Health. This settlement resolves allegations that Sutter knowingly submitted inaccurate diagnosis codes for beneficiaries enrolled in Medicare Advantage Plans. According to the government’s allegations, Sutter Health knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under its care. As a result, these unsupported diagnosis codes caused inflated payments to be made to the plans and to Sutter Health.

Freedom Health Agreed to Pay $32.5 Million to Settle False Claims Act Allegations

In May of 2017, Florida-based provider of managed care services Freedom Health, agreed to pay $32.5 million to resolve a whistleblower lawsuit alleging they violated the False Claims Act by engaging in illegal schemes to maximize their payment from the government in connection with their Medicare Advantage plans. According to the government, Freedom Health submitted or caused others to submit unsupported diagnosis codes to The Centers for Medicare & Medicaid Services (CMS), which resulted in inflated reimbursements from 2008 to 2013.

The High Price of Medicare Advantage Fraud

When an organization exploits government-funded programs, like Medicare, they take money directly out of the US taxpayer’s pockets. Miscoding patient diagnoses in order to qualify for additional funds not only steals from American taxpayers but also the millions of Americans who rely on these plans for care. This is why we must work together to expose fraud wherever possible.

Blowing the Whistle on Medicare Advantage Fraud

Whistleblowers play a major role in the fight against corruption, fraud, and wrongdoing in Medicare Advantage fraud. These brave individuals have helped save millions in public funds and the integrity of our healthcare system.

Our goal at DJO is to expose fraud wherever and whenever possible. We work with individuals to gain information, build a case, and fight for taxpayers’ justice. In doing so, we can protect the vulnerable and make the world a safer place.

If you suspect fraud in your organization, please contact us. DJO is comprised of a highly experienced team of whistleblower experts, lawyers, and even former whistleblowers, who strive to deliver the highest monetary reward for brave individuals who have valuable information that can expose fraud. If a whistleblower’s lawsuit is successful, the reward can be up to 25% of the funds recovered. The False Claims Act also offers whistleblowers protection against job retaliation or wrongful termination.

Do you have valuable information that can help bring fraud to light? Speak to our experts today.