On August 30, 2021, Keller Grover LLP announced the settlement of a landmark $90 million False Claims Act (FCA) settlement against Sutter Health on behalf of their whistleblower client, Kathy Ormsby, alleging a massive Medicare fraud in Sutter’s Medicare Advantage program.
Keller Grover is proud to announce that the $90 million Sutter settlement is the largest FCA settlement against a hospital system involving allegations of fraud on the Medicare Advantage program, and the second largest reported Medicare Advantage fraud settlement ever.
In 2015, Ms. Ormsby filed her lawsuit under the qui tam provisions of the False Claims Act, which permit whistleblowers like her to file lawsuits to recover taxpayer dollars lost to fraud against the government. Ms. Ormsby alleged that Sutter and its numerous affiliates knowingly submitted false, inaccurate and unsupported medical diagnosis codes that inflated Sutter’s reimbursements from Medicare Part C (Medicare Advantage Program).
The Medicare Advantage Program allows qualified patients to enroll in privately-run managed care plans that provide coverage for both inpatient and outpatient services. The Medicare Advantage Program pays for care with a monthly payment to the healthcare provider that is based on the health of the patient as documented in the medical record through the use of diagnosis codes, known as a risk adjustment factor (RAF). Ms. Ormsby was the RAF Manager at one of Sutter’s affiliates.
From day one at Sutter, Ms. Ormsby witnessed firsthand massive problems with Sutter’s RAF compliance program. With her years of RAF compliance experience, Ms. Ormsby had serious concerns that Sutter was submitting claims for government reimbursement based on false, incorrect or unsupported diagnosis codes in patient medical records.
Ms. Ormsby raised her concerns to Sutter management numerous times but they repeatedly rejected her efforts to bring Sutter into compliance, and instead took affirmative steps to stop her efforts to identify the scope of the problem. When it became clear that Sutter was not going to reimburse the government for false, inaccurate and unsupported claims, Ms. Ormsby hired Keller Grover LLP to help her alert the government to what Ms. Ormsby believed to be an enormous fraud – causing knowingly false claims for payment of government reimbursements.
Ms. Ormsby, and the team of lawyers Keller Grover LLP assembled, including Constantine Cannon, and Kleiman Rajaram, spent the next six years investigating and litigating the case alongside the government before Sutter agreed to settle for $90 million. As a part of the settlement Sutter entered into a groundbreaking Corporate Integrity Agreement with the Department of Health and Human Services, Office of the Inspector General, whereby the government will monitor Sutter’s continued participation in the Medicare Advantage program for compliance with the program rules. This Corporate Integrity Agreement is the first such agreement by the government involving risk adjustment factor fraud in a Medicare Advantage Program.
If you believe someone has knowingly committed Medicare or Medicaid fraud and you would like to learn more about bringing a Medicare or Medicaid whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. We understand qui tam litigation, have a proven track record, and strive to achieve the best possible results for our clients.