Unique Whistleblower Lawsuit Points Finger at Insurance Company Aveta, Inc.

In today’s whistleblower case, we examine a story involving health insurance company Aveta, Inc. and its ongoing defense of a whistleblower lawsuit brought by former employee Josh Valdez. According to the complaint, Aveta and its affiliated Puerto Rican Medicare Advantage health care plans bilked the U.S. government out of nearly $1 billion dollars through overcharges and fraudulent, illegal business practices. The lawsuit, which was filed in 2011, was unsealed  in February of this year and still under investigation by the DOJ. If Mr. Valdez is successful in his whistleblower claim, he could receive up to 30 percent of the total amount of any settlement or judgment entered in favor of the U.S. government. With allegations in the nine figures, this amount could be extremely substantial.

Details of Case Against Aveta

Aveta, Inc. is a New Jersey-based corporation offering healthcare plans including MMM Healthcare and PMC Medicare Choice. According to the facts alleged in the complaint, these plans sought out only the most critically ill patients or those facing the most expensive medical conditions or injuries. From there, the plans worked to manipulate the “risk score” analysis implemented by Medicare to help determine the level of a patient’s medical needs and risk – which is used to determine that patient’s rate for benefits.

According to Valdez, the risk scores assigned to patients under the plan were fraudulent, inflated, and not indicative of the true risk imposed by the patient. Further, these risk scores “were false or fraudulent because they were based on diagnosis codes that were not substantiated by the medical records or by the medical conditions of the Medicare beneficiaries served by the plans….” These patients were routinely classified as “chronically ill” — thereby garnering the highest level of reimbursement — when, in fact, their conditions did not meet this definition or such a diagnosis was not supported by medical records. What’s more, the plaintiff asserts that at a 2010 business meeting between Aveta executives, the CEO of Aveta remarked that the company would be “screwed” if the government ever decided to audit its Medicare billing procedures – and asserted that Medicare overcharges had been “particularly egregious” that year.

The federal government allows private insurers to conduct risk assessments regularly, relying on the veracity of the resulting score when determining policy rates. According to the complaint, CMS never reviewed these plans and an audit was never conducted – notwithstanding the alleged overpayment of nearly $1 billion.

Backlash From Aveta

Aveta has claimed that Mr. Valdez is a mere “disgruntled employee,” noting that the company “categorically denies the allegations in the former employee’s lawsuit and is highly confident that it will prevail in the case.”

However, at the time of the lawsuit, relator Valdez was serving in a top-level executive position within the company. Prior to working at Aveta, he served as the head of the California branch of the U.S. Department of Health and Human Services, as well as a health policy advisor to those in the political arena.

Contact a Whistleblower Attorney Today

Healthcare fraud is one of the most expensive problems facing the United States today. With recoveries under the False Claims Act in the billions of dollars, now is the time to speak with a whistleblower attorney if you are aware of any conduct similar to that described above. For more information, contact Berger Montague today.