(WIVB) – Government prosecutors are accusing Independent Health of “cooking the books” in the Medicare program – to the tune of tens of millions of dollars.

The justice department’s action was triggered by a whistleblower lawsuit.

The lawsuit centers on payments health insurers receive through the Medicare Advantage Program, depending on a patient’s level of risk.

The sicker the patient, the higher the risk score, and a higher reimbursement from the government.

“The number of claims is just astronomical, over 100,000 false claims are alleged,” said James Kennedy, U.S. Attorney, while summing up the government’s case against Independent Health and a former subsidiary, Dxid, in a lawsuit over reimbursements from the Medicare Advantage Program, also known as Medicare Part C.

Kennedy says that Independent Health created Rochester-based Dxid as a billing agent on a contingency basis. After reviewing medical claims, the subsidiary could get as much as 20 percent of any additional funds.

“This was just a matter of sort of cooking the books,” Kennedy said.

Kennedy adds that rather that basing the codes on the doctors’ determinations, Dxid engaged in what could be described as “Medical profiling”, based on the member’s age and other factors.

Independent Health responded to the lawsuit, saying after a thorough investigation of the whistleblower complaint, the Department of Justice had chosen not to intervene until Independent Health and Dxid filed a motion to dismiss.

Independent Health and Dxid, which was closed down earlier this year deny all allegations of wrongdoing.
And both companies believe the coding policies being challenged were lawful and proper, and all parties were paid appropriately.

The justice department actually joined the whistleblower lawsuit filed by an employee of a Medicare insurer in the state of Washington, which had a contract with Dxid.

That Washington insurer settled out of court, last year, for more than $6 million.