Understanding the Kaiser Permanente Medicare Advantage Investigation
Providing educational information to help you understand how reported practices may have affected patient medical records and Medicare funding.
Case Overview
The United States government has filed a legal complaint alleging that Kaiser Permanente engaged in a coordinated, years-long scheme to unlawfully increase its revenue from the Medicare Advantage (Part C) program.
The Allegation
Kaiser allegedly exploited the risk-adjustment system by “over-reporting” diagnosis codes to make patients appear sicker than they actually were.
Internal Strategy
Internal documents showed that executives viewed risk adjustment as the “biggest lever” to increase Medicare revenue.
The "Risk Adjustment" System
How the government pays Medicare Advantage plans fairly—and how it can be exploited.
Monthly Fees
The Centers for Medicare and Medicaid Services (CMS) pays health plans a monthly fee for each enrolled patient.
Fair Payment Scoring
To ensure plans are paid fairly for sicker members, patients with chronic conditions are assigned higher “risk scores.”
Revenue Leveraging
Higher scores result in higher payments. The government alleges Kaiser manipulated these scores to secure unearned funding.
Retrospective "Addenda"
Physicians were reportedly pressured to add diagnoses to medical records retrospectively—often months or even a year after a patient’s visit had ended.
Data Mining
Automated algorithms ‘mined’ patient files for mentions of high-value diagnoses.
Physician Pressure
Physicians were queried to add diagnoses to past visits, even if not discussed.
Contradicting Records
Diagnoses were added despite medical records for the visit contradicting the condition.
Impact on Patients
A major concern for patients is the accuracy of their medical records. Roughly half a million diagnoses were allegedly added via this process.
Communication Gaps
In many instances, patients were never told they had been diagnosed with the new conditions added to their files.
Targeted Diagnoses
Focus was often on lucrative conditions: Aortic Atherosclerosis (AA), Cachexia (physical wasting), and Malnutrition.
Example Case: Aortic Atherosclerosis (AA)
After an aggressive internal campaign, the rate of AA diagnoses among Kaiser’s California patients rose from 2% to over 40% by 2018.
Additional Educational Materials
Explore these visual and audio guides to better understand the investigation details.
