Bravo Health Pennsylvania, Inc. (Bravo), a Medicare Advantage Plan Sponsor and subsidiary of Cigna Corporation, agreed to pay $225,000 to the Government for allegedly misrepresenting or falsifying information furnished to the OIG during an audit.  Bravo and the OIG entered into the settlement on July 26, 2013.

While public details surrounding the settlement are scant, the OIG alleged that during an audit Bravo provided medical records to the OIG “that were intentionally altered prior to their submission or resubmission.”

According to statements made by an OIG official that were recounted in the Report on Medicare Compliance (subscription required), Bravo added “diagnosis notations” and a physician signature to medical records in response to the OIG’s request for additional information during an audit.  The OIG was able to identify that changes were made to medical records because Bravo submitted the same documents, in their original form without alteration, earlier in the audit.  The OIG issued a pre-demand letter, and the parties reached a settlement before a formal letter demanding civil monetary penalties was issued.

Capitated payments CMS makes to Plan Sponsors are made on a risk adjusted basis and therefore beneficiaries’ health care conditions play an important role in Medicare Advantage reimbursement.  Medical records and the data included in them, such as applicable diagnosis codes, where and when services are provided, and who provides the services, are vital to establish the underlying health conditions of beneficiaries in the plan.  Accordingly, it is not surprising that OIG took action if it believed Bravo submitted altered medical documentation.

Over the years, the OIG has routinely reached settlements with physicians, hospitals, and other healthcare providers as a result of alleged noncompliant conduct relating to kickback and physician self-referral prohibitions.  In addition, CMS has used its authority under Medicare Parts C and D to levy sanctions, including civil monetary penalties, against Medicare Advantage and Prescription Drug Plan Sponsors for a wide spectrum of conduct.  But settlements between the OIG and Medicare Advantage Organizations have been rare where Medicare Part C sanction authority is used.  In fact, the Bravo case is only the second time that the OIG has used its authority to sanction a Medicare Advantage Organization for misrepresenting or falsifying information.

It remains to be seen whether OIG’s settlement with Bravo is an isolated incident or if it signals the beginning of OIG efforts to target audits of Medicare Advantage Organizations as an avenue to collect significant penalties from Plan Sponsors.  Nevertheless, Medicare Advantage Plan Sponsors and their downstream contractors are now on notice that OIG can and will use Medicare Part C sanction authority if it believes false documentation is provided during audits.