Office of the Attorney General
AmeriHealth Mercy to Pay $2 Million for Submitting False Report

Press Release Date:  Wednesday, January 26, 2011  
Contact Information:  Allison Gardner Martin
Communications Director
502-696-5651 (office)

Attorney General Jack Conway and his Office of Medicaid Fraud and Abuse Control today announced that AmeriHealth Mercy Health Plan (AMHP), the Third Party Administrator for the Passport Health Plan, has agreed to pay $2,032,758 in damages to the Kentucky Medicaid Program. Passport is the state's Medicaid managed care plan that serves Medicaid recipients in a 16-county area in and around Louisville.

The Consent Judgment and Assurance of Voluntary Compliance filed in Franklin Circuit Court this week is based on a nine-month investigation conducted by the Attorney General's Office of Medicaid Fraud and Abuse Control.

"Thanks to the hard work of the investigators and attorneys in my Office of Medicaid Fraud and Abuse Control, we have been able to make this substantial recovery for our Medicaid program," General Conway said. "Kentucky taxpayers can rest assured that we are doing all we can to control fraud and abuse in the Medicaid program."

The Attorney General's investigation centered on an allegation that AMHP falsely reported its Health Effectiveness Data and Information Set (HEDIS) score for the Cervical Cancer Screening (CCS) measure to the Department of Medicaid Services in 2009. HEDIS scores measure the performance of health care plans in specified areas such as how many Medicaid recipients received cervical cancer screens. HEDIS scores are a ratio of plan members in an eligible population who receive a service. For Cervical Cancer Screening, the score is measured by determining how many eligible females received a Pap smear. Members may also be excluded if they received a full hysterectomy.

In 2009, AMHP was under contract with University Health Care, Inc. (UHC) to manage the Passport Health Plan. The contract provided for a bonus payment to AMHP if it achieved certain goals. If AMHP achieved a higher Cervical Cancer Screening score, it received more than $677,000 in bonus money from UHC.

The Commonwealth alleges that for the 2009 CCS HEDIS measure, AMHP excluded members as having a full hysterectomy where there was no medical evidence of a full hysterectomy. This increased the HEDIS score. AMHP also counted members as having received a Pap smear where there was no medical evidence of a Pap smear. This also increased the HEDIS score. Together, these acts enabled AMHP to meet its goal and receive more than $677,000 from UHC in Medicaid funds.

The more than $2 million in the Judgment constitutes treble damages, or triple the amount of the actual damages, for the Kentucky Medicaid Program. In addition to the damages, the agreement requires that AMHP put procedures and personnel in place to ensure that all reports sent to both the Commonwealth and UHC, including HEDIS scores, are fully and completely accurate in the future.

Attorney General Conway's Office of Medicaid Fraud and Abuse Control was assisted by the United States Attorney's Office for the Western District of Kentucky and the Department for Medicaid Services. University Health Care, which was not a party to the case, and AMHP fully cooperated with this investigation.

Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $154 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.