Earlier this month, Sutter Health agreed to settle allegations that it was overcharging the federal government for treatment of certain Medicare patients. Sutter Health is a nonprofit organization that runs several medical foundations and hospitals and it is based in Sacramento. According to the U.S. Department of Justice, Sutter Health agreed to pay $30 million. The health care provider has contracts with Medicare Advantage private plans and collects part of the Medicare payments for patients it treats. According to the original complaint, several Sutter affiliates submitted inappropriate patient diagnoses that resulted in Medicare overpaying for their care.

The Sutter Health affiliates named in the complaint were Sutter Medical Foundation in Northern California, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation in San Francisco and the North Bay, and Sutter Gould Medical Foundation in the Central Valley. Apparently, the allegations involved people enrolled in Medicare Advantage (Medicare Part C), which gives beneficiaries the option of enrolling in private insurance plans. The private plans are paid by Medicare on a per-person basis, with the amount being determined by a person’s individual health risk score. The Sutter affiliates were allegedly submitting unproven diagnoses for certain patients to elevate their risk score so that the private plans and Sutter collected more money. Hopefully other health care providers are deterred from doing the same thing.

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