Fred Schulte | (TNS) KFF Health News
The nation’s largest independent network of primary care medical practices, overseen by a Maryland firm, is in trouble due to a whistleblower lawsuit. The lawsuit alleges that the firm cheated Medicare out of millions of dollars by using billing software that made patients seem sicker than they were.
According to the civil suit, Aledade Inc.’s billing apps and other software provided to doctors inflated revenues by adding overstated medical diagnoses to patients’ electronic medical records.
The lawsuit claims that Aledade made patients appear sicker than they really were by any means necessary.
For instance, it is alleged that Aledade combined anxiety with depression to increase payments by $3,300 per patient per year. Additionally, the suit states that Aledade categorized patients over 65 who reported more than one drink per day as having substance use issues, which could generate an extra $3,680 per patient.
Khushwinder Singh, a former “senior medical director of risk and wellness product” at Aledade, filed the whistleblower case in federal court in Seattle in 2021. He claims that the company terminated his employment after he objected to its fraudulent behavior. Singh refused to comment on the lawsuit.
The case is ongoing and Aledade has not yet responded in court. Julie Bataille, Aledade’s senior vice president for communications, refuted the allegations, stating in an interview that “the whole case is totally baseless and meritless.”
Aledade, based in Bethesda, Maryland, manages independent primary care clinics and medical offices in over 40 states, catering to approximately 2 million people.
Aledade is part of a group of organizations known as accountable care organizations, which receive significant support from federal health officials aiming to enhance population health and achieve cost savings. Aledade was co-founded in 2014 by Farzad Mostashari, a former health information technology chief in the Obama administration, and has attracted other former government health officials. In June 2023, President Joe Biden chose Mandy Cohen, who was previously the executive vice president at Aledade, to lead the Centers for Disease Control and Prevention in Atlanta. Aledade has experienced rapid growth with the help of hundreds of millions of dollars in venture capital financing and was valued at $3.5 billion. Farzad Mostashari, Aledade’s chief executive officer, declined to be interviewed on the record.
“As this is an active legal matter, we will not respond to individual allegations in the complaint,” Aledade said in a statement to KFF Health News. “We remain focused on our top priority of delivering high-quality, value-based care with our physician partners and will defend ourselves vigorously if needed in a court of law.” The lawsuit also names 19 independent physician practices, many in small cities in Delaware, Kansas, Louisiana, North Carolina, Pennsylvania, and West Virginia, as defendants. According to the suit, these doctors knowingly used Aledade software to engage in illegal billings, a practice known as “upcoding” in the medical industry. None of these doctors has responded in court.More than twenty-five employees who report illegal activities at work, some of which go back more than ten years, have accused Medicare health plans of charging the government too much by claiming medical conditions that don't have enough evidence in patient medical records. These cases have led to hundreds of millions of dollars in fines. In September 2023, Cigna
agreed to pay $37 million to resolve one such case, for example. in 2023.
But the employee lawsuit filed against Aledade appears to be the first to claim that accountable care organizations, which are part of their mission to prevent wasteful spending, are falsely increasing the charges. ACOs like Aledade
made headlines
recently for helping to reveal a large Medicare fraud involving urinary catheters, for example.
Finding the ‘Gravy’ Singh’s lawsuit targets Aledade’s use of coding software and guidance to medical practices that joined its network. Some doctors treated patients on standard Medicare through the ACO networks, while others cared for seniors enrolled in Medicare Advantage plans, according to the lawsuit. Medicare Advantage
is a privately run alternative to standard Medicare that has become very popular and now serves more than 30 million people. Aledade has tried to expand its services to Medicare Advantage enrollees. The lawsuit alleges Aledade encouraged doctors to add questionable medical diagnoses to get more money. Aledade referred to this as finding “the gravy sitting in the [patient’s] chart,” according to the lawsuit. The company “instructed” providers to diagnose diabetes with complications, “even if the patient’s diabetes was under control or the complicating factor no longer existed,” according to the lawsuit.
Some medical practices in Delaware, North Carolina, and West Virginia charged the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the lawsuit.
The lawsuit also alleges that Aledade “rigged” the software to change a diagnosis of overweight to “morbid obesity,” which could pay about $2,500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the lawsuit.
“This fraudulent coding guidance was known as ‘Aledade gospel,’” according to the lawsuit, and following it “paid dividends in the form of millions of dollars in increased revenue.” These tactics “usurped” the clinical judgment of doctors, according to the lawsuit. ‘No Diagnosis Left Behind’ In its statement to KFF Health News, Aledade said its software offers doctors a range of data and guidance that helps them evaluate and treat patients.
“Aledade’s independent physicians remain solely responsible for all medical decision-making for their patients,” the statement read.
The company said it will “continue to advocate for changes to improve Medicare’s risk adjustment process to promote accuracy while also reducing unnecessary administrative burdens.”
In a message to employees and partner practices sent on Feb. 29, Mostashari noted that the Justice Department had declined to take over the False Claims Act case.
“We recently learned that the federal government has declined to join the case
U.S. ex rel. Khushwinder Singh v. Aledade, Inc. et al
. It's great news, and a decision we completely support considering the unfounded claims about improper coding practices and unfair termination made by a former Aledade employee three years ago. We don't know what will happen with the legal situation yet, but we will strongly defend ourselves in court if necessary,” the statement said.
The Justice Department told the Seattle court on Jan. 9 that it would not get involved in the case “at this time,” which led to an order to unseal it, court records show. Under the false claims law, whistleblowers can continue with the case independently. The Justice Department doesn't give a reason for refusing a case but has stated in other court cases that doing so doesn't reflect on its merits.
Singh claims in his complaint that many “unsupported” diagnosis codes were added during annual “wellness visits,” and that they didn't actually lead to the patients getting any extra medical care.
Aledade kept Slack channels where doctors could talk about the financial incentives for adding higher-paying diagnostic codes, according to the lawsuit.
The company also closely monitored how doctors coded as part of an initiative called “no diagnosis left behind,” according to the lawsuit.
KFF Health News
, previously known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of — the independent source for health policy research, polling and journalism.)©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.
The civil suit claims that Aledade Inc.’s billing apps and other software and guidance given to doctors improperly increased revenues by adding exaggerated medical diagnoses to patients’ electronic medical records.
Singh argues in his complaint that many “unsupported” diagnosis codes were added during annual “wellness visits,” and that they did not result in the patients receiving any additional medical care.
Aledade maintained Slack channels in which doctors could discuss the financial incentives for adding higher-paying diagnostic codes, according to the suit.
The company also closely monitored how doctors coded as part of an initiative dubbed “no diagnosis left behind,” according to the suit.
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(KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of KFF — the independent source for health policy research, polling and journalism.)
©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.
