DOJ Announces $90M False Claims Act Settlement with Sutter Health

In a press release issued on Monday, the Department of Justice (DOJ) announced a False Claims Act settlement against Sutter Health. The government alleged that the company inflated payments made to Sutter Health by using certain diagnosis codes for patients that were unnecessary.

Some of the claims resolved by the settlement, according to the DOJ, were brought originally by a whistleblower who is a former employee of Palo Alto Medical Foundation. The complaint in that case was originally filed in 2015, and stated that Sutter allegedly defrauded Medicare Part C by submitting “inaccurate and unsupported medical information.” The complaint alleged that Sutter maintained inadequate training and controls for checking submitted codes.

According to the DOJ, the government did not intervene on behalf of that whistleblower, but some of the whistleblower’s claims are covered by the settlement.

Under the deal, Sutter will enter into a Corporate Integrity Agreement with the Department of Health and Human Services for the next five years. The agreement mandates that the company “implement a centralized risk assessment program as part of its compliance program and hire an Independent Review Organization to annually review a sample of Sutter Health’s Medicare Advantage patients’ medical records and associated diagnoses data.”