On 8 August 2019 Beaver Medical Group LP and a Beaver-affiliated physician, Dr Sherif Khalil, agreed to pay a combined total of $5 million to resolve allegations that the providers had knowingly submitted diagnosis codes that were not supported by the medical records in order to inflate reimbursements from Medicare. The qui tam action was brought by a former Beaver employee, Dr David Nutter, and the Department of Justice (DOJ) intervened.

The settlement reflects the DOJ's continuing efforts to use its enforcement power to pursue fraud in the Medicare Advantage space despite recent setbacks in UnitedHealthcare Insurance Co v Azar,(1) which vacated a portion of the Centre for Medicare and Medicaid Services' 2014 final overpayment rule applicable to the Medicare Advantage programme (for further information please see "Court vacates Medicare Advantage overpayment rule and curtails DOJ's pursuit of False Claims Act damages"). Indeed, in its press release, the DOJ emphasised that preventing Medicare Advantage fraud remains a top priority:

As enrollment in Medicare Advantage continues to grow, investigation into accuracy of diagnosis data becomes ever more important… Those who inflate bills sent to government health programs can except to pay a heavy price.(2)


(1) 330 F Supp 3d 173 (DDC 2018).

(2) The DOJ's press release is available here.

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