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News
Philadelphia-based insurer Independence Blue Cross (IBX) will pay $22.5 million to settle DOJ allegations that it submitted inflated diagnosis codes to Medicare Advantage, making patients appear sicker than they were to collect higher payments. The fraud allegedly occurred between 2016 and 2020. A former IBX employee who blew the whistle will receive $3.8 million of the settlement.
Philadelphia-based insurer Independence Blue Cross (IBX) has agreed to a $22.5 million settlement with the Department of Justice over allegations that it knowingly submitted inflated diagnosis codes for Medicare Advantage (MA) enrollees — a practice known as upcoding — to collect higher payments from CMS than it was entitled to.
The allegations cover 2016 to 2020 and center on IBX's retrospective chart review program, in which nurses were hired to identify additional diagnosis codes to submit to Medicare. The company allegedly failed to investigate or withdraw inaccurate codes found during those reviews, while falsely certifying to CMS that its data was "accurate, complete, and truthful." IBX settled to avoid prolonged litigation but did not admit wrongdoing, calling the matter one of "differing views regarding certain documentation and reporting requirements."
By the Numbers:
Why it matters: IBX's settlement is part of a broader federal crackdown on MA upcoding fraud, which costs taxpayers tens of billions annually. With Kaiser Permanente, UnitedHealth, and Humana also facing scrutiny, regulators are signaling that no insurer — large or small — is above accountability when it comes to gaming Medicare's risk adjustment system.
