An older woman gets a checkup at home. Photo: Jahi Chikwendiu/The Washington Post via Getty Images

Dialysis chain DaVita this week agreed to pay $270 million to settle allegations that physicians in its medical group fudged how sick their patients were so they could get paid more from Medicare Advantage plans — which in turn got higher payments from the federal government.

Why it matters: DaVita's settlement eliminates a three-year-old probe. But the entire Medicare Advantage industry — estimated to cost the federal government $250 billion in 2019 — remains under the microscope for gaming the payment system.

What's next: The Department of Justice is continuing its investigation of the coding practices of the largest health insurance companies in the country.

  • Aetna, Anthem, Centene, Cigna, Humana and UnitedHealth Group have disclosed to investors in quarterly securities filings that DOJ is probing their "risk adjustment practices" as part of a "wider review of Medicare risk adjustment generally that includes a number of Medicare Advantage plans, providers and vendors."
  • UnitedHealth also is battling a whistleblower lawsuit that alleges the insurer went through patient medical records and purposely exaggerated diagnoses. UnitedHealth says the lawsuit has no merit and says federal rules have been unclear.
  • DaVita's settlement covers allegations it not only looked back and submitted diagnosis codes that could not be supported medically, but also did not delete unsubstantiated codes.
  • Coincidentally, DaVita is selling the physician group involved in the settlement to UnitedHealth. Federal antitrust regulators are still reviewing the deal.

How it works: Health insurers that sell Medicare Advantage plans assign "risk scores" to their members, based on the health conditions they have. The higher the risk score, the more conditions someone has, and the more money the insurer gets for covering them.

  • Yes, but: Research and reporting have found payments to Medicare Advantage plans "exceed what is warranted" because of the industry's aggressive, yet technically legal, medical record coding.

The big picture: The federal government expects more than 22 million seniors and disabled people, or about 37% of all Medicare enrollees, to be in a Medicare Advantage plan next year. Wall Street predicts half of all Medicare beneficiaries will be in Medicare Advantage by 2021.

  • Growth in the program won't wash away concerns about coding. Pending whistleblower suits allege Medicare Advantage insurers and coding vendors aggressively document patients' health statuses during home visits.

Go deeper

Updated 16 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Pence chief of staff Marc Short tests positive for coronavirus — COVID-19 looms over White House Halloween celebrations
  2. Health: Fauci says maybe we should mandate masks if people don't wear them — America was sick well before it ever got COVID-19
  3. World: Polish President Andrzej Duda tests positive for COVID-19.

Pence chief of staff Marc Short tests positive for coronavirus

Marc Short with Katie Miller, Vice President Pence's communications director, in March. Photo: Doug Mills/The New York Times via Reuters

Marc Short, Vice President Mike Pence’s chief of staff, tested positive for the coronavirus Saturday and is quarantining, according to a White House statement.

Why it matters: Short is Pence's closest aide, and was one of the most powerful forces on the White House coronavirus task force.

6 hours ago - World

Opposition leader Leopoldo López flees Venezuela

Venezuelan opposition politician Leopoldo López outside the Spanish embassy in Caracas, in 2019. Photo: Juan Barreto/AFP via Getty Images

Leopoldo López, a former political prisoner and prominent Venezuelan opposition leader, has left the country, his Popular Will party confirmed in a statement Saturday.

Why it matters: He's been an influential force in the push to oust President Nicolás Maduro's regime and a mentor to opposition leader Juan Guaidó. He'd been in the Spanish ambassador's Caracas residence since escaping house arrest in April 2019 following a failed military uprising.