The second of two recent lawsuits against Medicare Advantage Organizations (MAOs) was announced on Tuesday, when the U.S. Department of Justice reported a $32.5 million settlement with Freedom Health Inc. and Optimum Healthcare, MAOs based in Tampa, Fla.
The reported settlement resolves allegations that the insurers violated the False Claims Act by engaging in illegal schemes to maximize their payment from the government in connection with their Medicare Advantage plans, according to a Justice Department news release posted on its website. Former Freedom Health Chief Operating Officer (COO) Siddhartha Pagidipati agreed to pay $750,000 to resolve his alleged role.
The whistleblower complaint, unsealed on Tuesday, alleged that Freedom and Optimum gamed risk-adjustment frameworks used by the Centers for Medicare & Medicaid Services (CMS) to make extra payments to MAOs for sicker patients or patients with multiple chronic conditions.
News of Tuesday’s settlement came on the heels of a story first reported by the New York Times on May 15 of a whistleblower lawsuit alleging that UnitedHealth Group annually made tens of billions of dollars in improper payments to insurers over the course of years. Benjamin Poehling, a Minnesota resident who once worked for UnitedHealth Group (UHG), made the allegations, also under the False Claims Act.
The Justice Department alleged that Freedom and Optimum submitted or caused others to submit unsupported diagnosis codes to CMS, resulting in inflated reimbursements from 2008 to 2013. The government also alleged that material misrepresentations were made to CMS regarding the scope and content of its network of providers in applying to CMS in 2008 to expand into new counties in Florida and other states.
The case was filed by Darren Sewell, MD in 2009. Sewell, who died in 2014, started working for Freedom Health in 2008 and filed his lawsuit in 2009.
“At the time of his death in September 2014, Dr. Sewell believed that risk-adjustment fraud was not limited to the conduct alleged in his complaint against Freedom Health and Optimum Healthcare, but rather was also being practiced at other Medicare Advantage plans throughout the industry, both large and small,” said Mary Inman, a whistleblower attorney at Constantine Cannon LLP who represents both Dr. Sewell in this matter and Poehling in his whistleblower action against UHG. “The Government’s intervention in February 2017 in a False Claims Act case filed by another whistleblower, Benjamin Poehling, against UnitedHealth Group, the nation’s largest operator of Medicare Advantage plans, alleging risk adjustment fraud, shows that Dr. Sewell’s prediction was right.”
Whether there was one or multiple factors that ultimately created a tipping point in favor of blowing the whistle, Inman told RACmonitor that she and her colleagues believe that what motivated Sewell to come forward was his concern, “borne from his training as a medical doctor who abided by his Hippocratic Oath, that Freedom’s and Optimum’s fraudulent practice of expanding its service areas into counties where it did not have an adequate provider and hospital network, as alleged in his complaint, compromised patient care.”
“His lawsuit raised concerns about several issues that he saw in his short time at the company,” Edward Arens, co-counsel with the law firm Phillips & Cohen, LLP, wrote in an email to RACmonitor.
“Medicare Advantage plans and risk adjustment in particular are enormous potential sources of fraud. The government is protecting both taxpayers and patients when it polices those areas carefully,” Arens added.
Arens said Sewell filed his lawsuit to ensure that all Medicare beneficiaries receive the services they are promised, whether they receive traditional Medicare or choose to enroll in a Medicare Advantage plan. Sewell believed it was important to alert the government to his allegations, Arens said, adding that Tuesday’s settlement “is a testament to Dr. Sewell’s courageous decision.”
“Dr. Sewell hoped that his case would send a message to Medicare Advantage plans that they must live up to their promises,” Arens said. “He would have wanted people who find themselves in his position to come forward and blow the whistle – a decision that can benefit both patients and taxpayers.”
EDITOR’S NOTE: The author of this article used artificial intelligence (AI)-assisted tools in its composition, but all content, analysis, and conclusions were based on the
Increasing pressure to improve emergency department (ED) throughput has led many hospitals to adopt workflows in which ED physicians initiate inpatient or outpatient observation orders
Please log in to your account to comment on this article.
Breast biopsy procedures may be clinically straightforward but accurately translating them into compliant billing can be anything but. In this focused webcast, Shawn Blackburn, CPC, CPMA, CIC, CRC, CCS-P breaks down how imaging guidance, lesion count, laterality, and payer expectations all impact how these procedures should be reported. Through clear explanations and real-world scenarios, you’ll gain practical insight into aligning clinical workflows with billing requirements, avoiding common pitfalls, and ensuring your documentation supports accurate reimbursement and compliance.
Gain clarity and confidence in OB‑GYN coding with this expert‑led webcast featuring Sherri L. Clayton, RHIT, CSS. You’ll learn how to apply global maternity package rules accurately, select the right CPT codes for procedures and visits, and identify documentation gaps that lead to denials. With practical guidance and real examples, this session helps you strengthen compliance, reduce audit risk, and ensure accurate reimbursement for women’s health services.
Uncover essential coding insights with nationally recognized coding authority Kay Piper, RHIA, CDIP, CCS. Through ICD10monitor’s interactive, on‑demand webcast series, Kay walks you through the AHA’s 2026 ICD‑10‑CM/PCS Quarterly Coding Clinics, translating each update into practical, easy‑to‑apply guidance designed to sharpen precision, ensure compliance, and strengthen day‑to‑day decision‑making. Available shortly after each official release.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s fourth quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Traditional utilization management models can no longer keep pace with regulatory shifts, payer scrutiny, and operational pressures. In this webcast, Tiffany Ferguson, LMSW, CMAC, ACM, ACPA-C, introduces an Adaptive Model strategy that modernizes UM through role specialization, technology-driven workflows, and proactive, team-based processes. Attendees will learn how to restructure programs to improve efficiency, strengthen clinical collaboration, and enhance financial performance in a rapidly changing healthcare environment.
Federal auditors are intensifying their focus on inpatient psychiatric facilities, using advanced data analytics to spotlight outliers and pursue high‑dollar repayments. In this high‑impact webcast, Michael Calahan, PA, MBA, Compliance Officer and V.P., Hospital & Physician Compliance, breaks down what regulators are really targeting in IPF-PPS admissions, documentation, treatment and discharge planning. Attendees will learn practical steps to tighten processes, avoid common audit triggers and protect reimbursement and reduce the risk of multimillion-dollar repayment demands.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Celebrate Lab Week with MedLearn! Sign up to win one year of our Laboratory All Access Pass! Click here to learn more →
Have a Medicare regulation question you’d love Dr. Hirsch to answer? Now is your chance! CLICK HERE to learn more→
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
