DxID Chart Review: One Vendor, Several Plans

DxID chart review across multiple health plans connects Independent Health, Group Health Cooperative and, in a separate whistleblower complaint, Martin’s Point. The vendor sold a search for additional diagnoses that could raise Medicare payments. The revealing part came when clients questioned what it found. For someone inside a coding contractor or health plan, these Medicare Advantage fraud allegations show why the contract, the disputed code and the client’s response belong in the same story.

Who Owned DxID and Who Bought Its Chart Reviews?

Independent Health owned DxID, and the vendor worked for its parent and other Medicare Advantage plans. The Justice Department’s account describes a wholly owned subsidiary created to search medical records retrospectively and query physicians for additional diagnoses. Group Health was a customer. The Martin’s Point whistleblower separately identified DxID as a contractor paid from the additional revenue its work generated.

A retrospective chart review looks through existing medical records for diagnoses that were not submitted when care occurred. Under Medicare Advantage’s payment system, diagnoses feed disease categories and risk scores that help determine the plan’s monthly payment. A diagnosis added after the visit can therefore increase what Medicare pays the insurer. The Centers for Medicare and Medicaid Services uses submitted diagnosis data before validating it, with audits coming after payment.

Ownership matters because the insurer can influence how diagnoses are found and coded. The 2015 National Bureau of Economic Research working paper Upcoding or Selection? Evidence from Medicare on Squishy Risk Adjustment estimated that fully integrated, physician-owned plans generated 16% higher risk scores for the same patients than fee-for-service Medicare. It also describes insurers supplying tools that prepopulate physician notes with prior-year diagnoses and seeking coding changes after encounters. In the DxID cases, the comparable operational question is who shaped the review and what the client accepted from it.

The DxID Pitch Put a Price on the Search

DxID offered clients a chart review paid from additional Medicare revenue. The government’s complaint quotes the vendor’s sales message, which promised no fee up front and payment only once the client was paid, as a percentage of the recoveries actually proved.

The government alleged that DxID’s review generated $12.34 million in additional Medicare revenue for Group Health, which paid the vendor 20% of that revenue under their contract. The vendor had a financial stake in what its reviewers found.

That arrangement pays for additions. Removing an unsupported diagnosis does not generate the revenue on which the fee depends. Across the industry, the Department of Health and Human Services Office of Inspector General’s review of 2016 chart reviews found that over 99% added diagnoses. The incentive behind one-way chart review is visible before anyone opens an individual patient’s chart: the added code and the deleted code have opposite effects on revenue.

Group Health Challenged the Codes and Submitted Them Anyway

The government alleged that Group Health’s own review exposed unsupported DxID codes and that executives still approved disputed submissions. The government’s complaint describes an internal audit in which at least 17 of 20 diagnosis codes captured by DxID failed documentation requirements.

The complaint describes alcohol dependence drawn from an old medical-history entry that the chart itself marked resolved. Another allegation concerned a major-depression code drawn from a problem list despite conflicting clinical notes. According to the complaint, the physician’s assessment described the depression as resolved and associated with bereavement. The disagreement was inside the medical record that the review was supposed to read.

The complaint also describes clinicians questioning old-heart-attack diagnoses. It alleges that executives acknowledged concerns about whether patients had actually experienced a heart attack, yet approved leaving disputed diagnoses in the submission. The alleged result was a higher bill for taxpayers from diagnoses the client’s own clinicians had questioned.

The complaint describes a similar problem in a dermatology visit. DxID allegedly captured uncontrolled diabetes from the patient’s problem list during an appointment for a skin lesion, despite no documentation that diabetes was a factor in the encounter. The government alleged that Group Health submitted that code for risk adjustment. In that account, a condition listed elsewhere in the chart became a diagnosis attributed to the skin-lesion visit and then a Medicare payment input.

Group Health, by then Kaiser Foundation Health Plan of Washington, agreed to pay $6,375,000 on November 16, 2020 to resolve allegations that unsupported diagnoses inflated its Medicare payments. A former employee brought the whistleblower case, and the Justice Department announced that the whistleblower would receive approximately $1.5 million. That employee’s case also reached Independent Health, the vendor’s owner.

Independent Health Owned the Vendor and Restarted the Work

The government alleged that Independent Health used its own subsidiary to obtain unsupported diagnoses, including through medical-record attachments requested after the encounter. Its complaint describes DxID staff going to provider offices, checking diagnoses on forms and presenting the prefilled forms for signatures with Independent Health’s permission.

The government also alleged that DxID inferred kidney disease from lab results without documentation that the provider had considered those results during the encounter. According to the complaint, the vendor treated a report’s availability as grounds to assume it had been reviewed. For a coder, that is a recognizable decision: the review supplies the connection to the visit that the visit note does not contain.

Independent Health’s meeting notes, quoted in the complaint, described signatures without updated diagnosis lists:

A signed form could feed the payment process while the medical record’s diagnosis list remained unchanged. The government alleged that the attachment process alone produced over 125,000 new diagnosis codes submitted by Independent Health.

The government alleged that Independent Health withdrew kidney-disease codes based on lab values for the 2010 service year but left the corresponding codes for 2011 and 2012 in place and continued the practice in later years. This is where the scope of a correction matters: acknowledging a problem with a method and removing every affected payment input are different decisions.

According to the complaint, Independent Health temporarily stopped using DxID in 2015 over concerns about the after-visit attachments, then restarted the chart-review program, attachments included, in 2016. The owner had stopped the work over concerns about the method and then brought it back.

On December 20, 2024, Independent Health agreed to make fixed payments of $34.5 million and contingent payments of up to $63.5 million on behalf of itself and DxID. The announced ceiling was up to $98 million, and the settlement reflected Independent Health’s ability to pay. The vendor’s former chief executive separately agreed to pay $2 million.

The settlement also required a five-year corporate integrity agreement with the Inspector General, including annual independent review of a sample of patient records and the associated internal controls.

Martin’s Point Adds a Separate Client’s Account

The Martin’s Point whistleblower alleged that DxID received a percentage of additional Medicare revenue under a contingency arrangement. The allegations about Martin’s Point’s internal response came from its own former risk-adjustment operations manager.

At the plan level, the whistleblower alleged that a 2017 review of charts from 2013 through 2015 found that patients did not have, or the charts did not support, 60% of the illnesses reported to and paid by Medicare. The whistleblower further alleged that Martin’s Point failed to investigate further, expand the sample or look for the errors in earlier periods.

The complaint also alleged that Martin’s Point undertook an audit to understand why it was falling behind a $26M retrospective chart-review revenue goal. A review designed to explain missing revenue can find unsupported diagnoses too. What the plan does with that finding is the part a revenue report alone cannot explain.

The Justice Department’s July 31, 2023 settlement announcement concerned additional diagnoses submitted from 2016 through 2019. It alleged that many codes identified through chart reviews lacked proper medical-record support. Martin’s Point agreed to pay $22,485,000 to resolve those allegations. The announcement said its whistleblower would receive approximately $3.8 million.

The Pattern Is in What Happened After the Objection

Across these accounts, the useful comparison is the response to a challenged diagnosis. The government alleged that Group Health clinicians questioned codes and executives approved disputed submissions. Independent Health allegedly corrected an earlier year, retained later codes and resumed a program it had paused. The Martin’s Point whistleblower described a review that found unsupported illnesses without prompting a broader investigation.

For a healthcare coder at the vendor, that comparison can begin with the coding instruction or the form sent to a physician. For a client employee, it may begin with an audit finding and the decision about what to send Medicare. Someone who worked across customer accounts may recognize a repeated instruction that a person at one plan would see only once. The significance lies in connecting that instruction to each client’s submissions and decisions.

The Contract and the Correction Belong Beside the Chart

The original encounter note and the later query or addendum show where the diagnosis came from. An audit finding, a code challenge and the subsequent submission history show what happened after someone questioned it.

A correction can close an internal work item while the information used for payment remains unchanged. The submission history shows whether the correction reached Medicare. Someone who understands the handoff between the health care record, the vendor and the plan can explain what a closed audit item actually accomplished.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Justice Department announced that the former Group Health employee would receive at least $8.2 million from the Independent Health settlement. Knowledge gained in one workplace can help explain a practice that travels through a contractor’s business.

When You Know Both Sides of the Vendor Relationship

If you know how a chart-review vendor’s instructions became a health plan’s Medicare submissions, talk with our Medicare Advantage whistleblower experts. We connect your knowledge of the vendor’s methods and the client’s decisions to a case strategy, bring in Medicare Advantage whistleblower lawyers who understand risk-adjustment evidence, and stand beside you throughout the case.