Health Firms to Pay $56.5M Over Bogus Medicare Diagnoses
Two healthcare assessment companies and their founder will pay $56.5 million to settle allegations they reported fake patient diagnoses to inflate Medicare Advantage reimbursements.
Health Firms to Pay $56.5M Over Bogus Medicare Diagnoses
Two businesses that performed in-home medical checkups and their founder have agreed to a massive payout to settle government accusations of bilking a federal health insurance program. Source: U.S. Department of Justice
Matrix Medical Network will hand over $36.5 million. HealthFair, a mobile clinic operator it bought in 2018, will pay $5 million. The man who started HealthFair, Shahriah "James" Ekbatani, must personally cover $15 million. Together, the $56.5 million settlement resolves False Claims Act allegations.
Prosecutors allege that from 2014 through 2019, Matrix pushed private Medicare Advantage insurers to report made-up or unsupported illness codes to federal health administrators. These included conditions like diabetic eye disease, irregular heartbeat, joint inflammation, and lung disorders. The accusations claim the diagnoses frequently lacked medical evidence and often had never been identified by any other doctor treating the patient within a two-year window before or after the home visit.
HealthFair faced parallel claims. Between 2015 and 2017, the firm allegedly reported diagnoses that were medically unsubstantiated or outright fabricated.
The fraud exploited how Medicare Advantage works: the government pays insurers higher rates for sicker patients. By falsely inflating how ill beneficiaries were, the companies pocketed bigger taxpayer-funded checks than they deserved.
Federal prosecutors blasted the scheme. Brett Shumate, a top civil division official, said false diagnoses drain public health dollars. Jay Clayton, the federal prosecutor in Manhattan, accused Matrix of deliberately hunting for profitable codes to boost insurer payments, often without meeting accepted medical standards.
The payouts resolve whistleblower cases brought in New York and Texas federal courts.
Source: DOJ Justice News