News: Sutter Health to pay $90 million in False Claims Act lawsuit settlement

Sutter Health has agreed to pay $90 million to the Department of Justice (DOJ) to resolve allegations that the entity violated the False Claims Act by “knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans.” This announcement comes as no surprise as the federal government has lately been scrutinizing payers for improper coding practices.

The government alleged that Sutter Health submitted unsupported diagnosis codes for certain patient encounters of beneficiaries. The unsupported codes caused inflated payments to be made to the entity. The lawsuit further alleged that once Sutter Health became aware of the unsupported diagnosis codes, it did not take corrective action to “identify and delete additional unsupported diagnosis codes.”

In a settlement, Sutter health said that had already partially resolved the issue for $30 million and that it agreed to pay an additional $60 million to resolve the litigation. The entity also noted it agreed to enter into a corporate integrity agreement with the Department of Health and Human Services (HHS) for five years. Sutter Health must also implement a cap on out-of-network services and abide by price transparency reform rules.

Editor’s note: The DOJ news release on the settlement can be found here. Additional ACDIS coverage of the government’s crackdown on improper coding practices can be found here.