The case began with someone who coded patient diagnoses for a living. Donna Irons, a former risk adjustment coder at AIDS Healthcare Foundation, is the whistleblower behind a False Claims Act lawsuit that ended Oct. 6 with the Los Angeles nonprofit agreeing to pay $1.44 million, the Justice Department said.

The government alleges that AHF submitted or failed to delete false or invalid diagnosis codes in order to increase payments from Medicare Advantage. The claims resolved by the settlement are allegations only, and the department says there has been no determination of liability.

The question for people on Medicare is how a billing-code scheme touches their costs. The announcement does not say that any enrollee paid more or lost coverage. The money at issue is what Medicare paid private plans, and the way those payments are set explains why diagnosis codes matter.

Why a diagnosis code moves a payment

Medicare Advantage plans are run by private insurers, and Medicare pays them a monthly amount for each enrollee. The Justice Department explains that the Centers for Medicare & Medicaid Services uses a model called Hierarchical Condition Categories to adjust those payments, paying more for sicker beneficiaries with higher-cost conditions.

That makes every diagnosis code a number with dollars attached, and it is why Medicare Advantage billing draws close attention from investigators. Assistant Attorney General Brett A. Shumate put it this way in the announcement: “The government relies on Medicare Advantage participants to submit accurate, substantiated diagnosis codes.” A code that does not belong in a patient’s record can raise the payment for that patient.

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The plans and the years involved

The settlement covers payment years 2017 through 2023, according to the Justice Department. AHF’s managed care division, Positive Healthcare Partners, operated special needs Medicare Advantage plans for people with HIV in Florida, Georgia and California.

The case is United States ex rel. Irons v. AIDS Healthcare Foundation d/b/a Positive Healthcare Partners, Civil Action No. 23-cv-2160, in the Central District of California. The Justice Department’s Civil Division, the U.S. Attorney’s Office for the Central District of California and the Health and Human Services Office of Inspector General investigated.

Special needs plans are a kind of Medicare Advantage plan built for people with particular conditions, and the department says these served beneficiaries with HIV. The department says the allegations concern diagnosis codes submitted to increase Medicare Advantage payments across the seven payment years.

What the whistleblower receives

The False Claims Act lets a private person file a suit on the government’s behalf, which is called a qui tam case. When the government recovers money, the person who brought the case can receive a share. Irons will receive $259,200 from the $1.44 million, the department says.

The settlement is not a finding that the Foundation broke the law. The department says the resolved claims are allegations only.

Who is on the hook for the money

Because the dollars at issue are Medicare payments to private plans, the loss in an upcoding case lands on the federal program. The announcement describes the harm as inflated payments from Medicare Advantage and does not describe any change to what individual enrollees pay, and it does not say anything about plan coverage going forward.

The department identifies Irons as the former coder who filed the suit, which was brought under the False Claims Act’s qui tam provisions, and the settlement resolves it.

Reporting Medicare billing problems

Medicare tells people to compare the dates and services on their statements with their own records, and to check the receipts and statements they get from providers for mistakes. The Medicare.gov fraud page lists 1-800-MEDICARE (1-800-633-4227) for reports and, for Medicare Advantage or drug plan holders, the Investigations Medicare Drug Integrity Contractor at 1-877-7SAFERX (1-877-772-3379). It also says Medicare will never call to sell anything or visit a home, and it recommends creating a secure Medicare.gov account to monitor Original Medicare claims and guarding the Medicare number and Social Security information carefully.

Reports can also go to the HHS Office of Inspector General at 1-800-HHS-TIPS or through its online fraud form. The office suggests including the name and contact details of the person or business involved, a description of what happened and when, and any documents such as billing records. It also cautions that not every submission leads to an investigation.

The Justice Department’s announcement ties the $1.44 million to payment years 2017 through 2023 and to the Central District of California case number 23-cv-2160.

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This article was produced with AI assistance and edited for accuracy against the Justice Department, Medicare.gov and HHS pages linked above.