The Department of Justice has filed a suit against a data mining company and a company that operates two Medicare Advantage plans for allegedly overcharging by "tens of millions". The suit claims that the data company, DxID, "relied on 'trolling' patient medical records" to upcharge the government for illnesses patients didn't actually have.

This suit represents one of the dozens of cases in which insurance providers are being accused of pervasive overcharging. Data companies like DxID are hired to help insurance companies calculate patients' "risk score", with higher risk scores meaning higher rates charged by the provider. Medicare Advantage plans are paid by the Centers for Medicare & Medicaid Services (CMS).

However, multiple government investigations, audits, and lawsuits, as well as dozens of whistleblower cases, allege that insurance providers habitually utilize falsified records in order to make more money.

While cases have been brought against insurers, his is the first suit filed by the federal government against a data mining company for helping Medicare Advantage programs overcharge the government. Most data mining companies don't charge up-front for their services but instead take up to 20% of the providers' revenue from the plan.

According to one report from the Department of Health and Human Services (HHS), overcharging by insurance providers topped $16 billion in 2020.

The recent DOJ suit was filed against DxID and the Independent Health Association of Buffalo. Independent Health operates two Medicare Advantage plans, a kind of private insurance that must follow certain Medicare regulations and receive Medicare approval. Medicare Advantage is ostensibly meant to be a more affordable option for seniors.

"We are aware of the DOJ complaint... and will continue to defend ourselves vigorously against the allegations. Because this is an open case I cannot comment further," a spokesperson for Independent Health, Frank Sava, wrote in an email to reporters.

The DOJ's suit is an expansion on a suit filed by whistleblower Teresa Ross against DxID, Independent Health, and Group Health Cooperative, one of the most prestigious health plans in the country. Ross alleged that in 2011, DxID helped Group Health increase its disease claims by more than $30 million in large part by submitting invalid bills. According to Ross, in one case, a patient described as "amazingly sunny" by his doctor was billed for "major depression" thanks to DxID.

The DOJ suit added to Ross' accusations, describing a practice of exaggerating or falsifying illnesses, including by continuing to bill for illnesses that had been resolved. In some cases, patients were cited as having renal failure, the most severe form of chronic kidney disease, despite there being no support for such claims.

The CMS is attempting to recover the money paid to health plans for fraudulent billing via the DOJ's suit. The suit is seeking treble damages under the False Claims Act, as well as civil penalties for each violation.

Previous suits against insurers like Sutter Health have settled for from $90 to $300 million.