Branson doctor accuses Cox, partner company of Medicare fraud

SPRINGFIELD — A Branson physician has blown the whistle on what he calls Medicare fraud at CoxHealth.

In a lawsuit filed in 2017 and unsealed earlier this year, Dr. Charles Rasmussen accuses the hospital system and two other Missouri companies of conspiring to make certain Medicare patients look sicker on paper to boost payments from the government.

Rasmussen’s claims center on how Cox, together with St. Louis-based Essence Healthcare and Lumeris, administered a program called CoxHealth MedicarePlus.

The program is one of a growing number of publicly-funded, privately-run “Medicare Advantage” plans designed to augment traditional Medicare with add-ons like dental and vision coverage.

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With these plans, the government pays organizations like Essence fixed amounts each month for each patient participating in their plan. The amount paid depends in part on the relative health of each patient, meaning plan administrators get more money to care for sicker patients.

The lawsuit accuses Cox of directing its physicians to take advantage of the arrangement through unnecessary examinations aimed at coding patients as higher-risk to juice government payouts.

“The basic scheme is to upcode patients with needless diagnoses to falsely enhance the (risk adjustment factor) score, and thereby receive millions of dollars more from (the government’s Centers for Medicare and Medicaid),” the lawsuit says.

The lawsuit also says that Essence uses Lumeris’s data compilation software to identify potential opportunities for “upcoding” under the guise of improving documentation and coordination of care.

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In an emailed statement to the News-Leader Tuesday on behalf of Essence and Lumeris, Essence spokesperson Joel Andersonsaid Rasmussen’s claims were "wholly without merit.”

“We are in the process of preparing our formal response to the frivolous complaint,” he wrote. “It is important to note that the government thoroughly investigated the allegations contained in the lawsuit and declined to join the plaintiff’s suit.”

An emailed statement from CoxHealth spokeswoman Kaitlyn McConnell struck the same tone.

“We are aware of the lawsuit, believe it is frivolous, and are confident we are fully compliant with the law,” she wrote.

Both spokespersons also noted the federal government declined to intervene in the case, casting it as a vote of confidence in their companies

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Lawsuit says critics forced out

The lawsuit includes emails indicating Rasmussen wasn’t the only Cox physician concerned about the hospital system’s arrangement with Essence, which was announced in 2014.

In one email, an unnamed physician expresses concern about how an Essence employee described one of the physician’s patients as an “opportunity” for “enhanced” coding to boost Medicare payments well above what the physician said the patient’s cost of care was.

“So now it seems that we as family physicians are being required to do the bidding for Essence to code in an ‘enhanced’ way, otherwise known as upcoding, to pad their bottom line,” the physician wrote. “That isn’t why I went into medicine.”

The lawsuit says two members of Cox’s executive staff responded to the email, and in doing so incriminated the hospital.

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One of the responses expressed shared surprise about the 86-year-old patient being described as an opportunity, but also goes on to describe Cox as being somewhat helpless amid changes in the industry and demands for Cox to close so-called “care gaps.”

“Most insurance companies, not just Essence, are establishing programs in which they (not us) identify these care gaps and pay us more or less based on how well we do in closing these,” the email reads.

It continues: “CoxHealth has less control over this than you might imagine. We are, for the most part on the receiving end of this and have millions of dollars at stake, based on our performance across a range of quality metrics.”

The lawsuit claims Cox treats patients on traditional Medicare differently, with no requirements for “enhanced encounters” or record reviews by Essence and Lumeris.

“In short, Cox does not commit fraud with its normal Medicare patients when it must interact with (the government) directly and provide itemized billing. Instead, Cox saves its fraud for its collaborations with Essence and Lumeris and the (Medicare Advantage) patients."

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The lawsuit also says Cox enforced their goals with incentives — $100 for each “enhanced encounter” form completed after examining certain patients — as well as threats.

“Whenever employees opted not to ‘play the game’ with this ‘program,’ the lawsuit says, “they were either forced out … or they resigned in order not to be complicit in a fraud on CMS and the United States taxpayers.”

The lawsuit adds that Cox made it “very clear” to Rasmussen that he either "play the game" or face termination, and that Rasmussen was ultimately terminated.

According to the lawsuit, Rasmussen is asking the court to, among other things, force Cox, Essence and Lumeris to cease what he claims is illegal conduct and pay the U.S. back for what he says they billed illegally.

He’s also asking to be reinstated at Cox with "full seniority" and back pay, with interest. The lawsuit says Cox retaliated against Rasmussen after he resisted their demands by cutting him off from various Cox programs and having him blacklisted at other local providers, hurting both his income and professional standing.

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The lawsuit remains pending in federal court. Last month, a judge denied an attempt by Cox and Essence to have the case dismissed on procedural grounds and sent it forward to mediation. If a settlement is not reached, the case could ultimately proceed to trial.

The lawsuit is not the first time Essence has faced scrutiny for its work this year.

In April, the U.S. Department of Health and Senior Services' in-house watchdog found some of the diagnosis codes Essence had submitted to the Centers for Medicare and Medicaid weren't supported in medical records.

The watchdog concluded that Essence received $158,904 in overpayments and recommended it refund them and make improvements in its practices.

Essence concurred with the recommendations, according to the report, and agreed to refund the money owed.

In a statement to the News-Leader, Essence said "it cooperated with the auditors, corrected any errors identified and reconciled potential overpayments." The statement also stated that no penalties were assessed against the plan.