Largest US Independent Primary Care Network Accused of Medicare Fraud

Finding the ‘Gravy’

Singh’s suit 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 suit.

Medicare Advantage is a privately run alternative to standard Medicare that has surged in popularity and now cares for more than 30 million people. Aledade has sought to expand its services to Medicare Advantage enrollees.

The lawsuit alleges Aledade encouraged doctors to tack on suspect medical diagnoses that paid extra money. Aledade called it finding “the gravy sitting in the [patient’s] chart,” according to the suit.

,

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 suit.

Some medical practices in Delaware, North Carolina, and West Virginia billed the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the suit.

The lawsuit also alleges that Aledade “rigged” the software to change a diagnosis of overweight to “morbid obesity,” which could pay about $2500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the suit.

“This fraudulent coding guidance was known as ‘Aledade gospel,’ ” according to the suit, 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 suit.

‘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. That’s good news, and a decision we wholeheartedly applaud given the baseless allegations about improper coding practices and wrongful termination brought by a former Aledade employee 3 years ago. We do not yet know how the full legal situation will play out but will defend ourselves vigorously if needed in a court of law,” the statement said.

The Justice Department advised the Seattle court on Jan. 9 that it would not intervene in the case “at this time,” which prompted an order to unseal it, court records show. Under the false claims law, whistleblowers can proceed with the case on their own. The Justice Department does not state a reason for declining a case but has said in other court cases that doing so has no bearing on its merits.

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.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.