Freedom Health: Unsupported Codes and Misrepresented Provider Networks

In the Freedom Health Medicare Advantage fraud settlement, the company agreed to pay $31,695,593 over allegations of unsupported diagnosis codes and misrepresented provider networks. The case reached into both sides of a health plan’s growth: the data that increased payments for enrolled members and the provider information used to seek permission to sell coverage in new areas. Someone inside coding may see the first. Someone inside provider contracting may see the second.

Freedom Health is a managed care company based in Tampa, Florida. The Justice Department announced the settlement on May 30, 2017, following a qui tam case brought by a former employee. The case raised claims under both the federal False Claims Act and the Florida False Claims Act. A former chief operating officer reached a separate settlement over his alleged role in the network representations.

Unsupported Diagnoses and Inflated Payments

The government alleged that Freedom Health submitted unsupported diagnosis codes to the Centers for Medicare & Medicaid Services, or caused others to submit them, resulting in inflated reimbursements from 2008 through 2013. The allegations concerned two Medicare Advantage plans operating in Florida.

Risk-adjustment fraud concerns the information that sets a plan’s payment. Medicare pays private plans monthly to provide coverage. Under the risk-score payment model, the agency multiplies the plan’s base payment by an enrollee’s risk score. Diagnoses feed the score, so a condition reported to Medicare can change what Medicare pays for that member.

That is why a coding decision can carry money even without a separate bill for another office visit. The payment changes because the submitted data describes a person expected to need more expensive care. An unsupported diagnosis that raises the score makes taxpayers pay for a level of illness the medical documentation does not support.

The government’s description also reaches beyond whoever pressed the submission button. It alleged that Freedom caused others to submit unsupported codes as well as submitting them itself. For an insider, the useful view may be upstream: what the medical record said, how it became a diagnosis code, and what information the plan passed along. The clinical record and the payment submission can tell different stories about the same member.

Provider Networks Behind an Expansion Application

The network allegation concerned what Freedom told Medicare about the physicians, specialists and hospitals available through its plans. The government alleged that Freedom misrepresented the scope and content of that network in an application submitted in 2008 to expand in 2009 into new Florida counties and other states.

Here, the information supported an expansion request. A diagnosis code could increase revenue from an existing member. A network representation could help a plan seek access to a new market. The application put the plan’s account of its provider relationships before the agency deciding whether it could expand.

Provider networks are the delivery side of the insurance product. A plan sells coverage, but members need physicians, specialists and hospitals through which to use it. The names behind that promise matter to the agency reviewing the plan and to the people choosing it. A provider-contracting employee may understand those relationships in a way that a list of names alone cannot convey.

The American Institutes for Research’s 2026 report, Medicare Advantage Fraud, Waste, and Abuse Policy Options, explains the business stakes. Most Medicare Advantage organizations contract with selected providers and facilities. Members who go outside that network generally face higher costs, sometimes the full cost of care. Whether a person’s providers participate is also an important factor in choosing a plan.

That gives a network representation commercial weight well beyond the application form. It describes the health care a plan says its members can reach. Freedom’s settlement put the truth of those representations alongside the truth of its diagnosis submissions.

The Network CMS Sees and the Directory Members See

The report identifies a gap between the provider data used for network approval and the directory used by members. It describes a risk that a plan could count providers in its submission to CMS while leaving some of those same providers out of its published directory.

The report proposes comparing directories with network-adequacy data to bring those accounts together.

It also describes directories containing inaccurate contact or practice information, providers without current plan contracts, or providers who do not exist. Those are business facts a network employee may already know.

The contracts, the application data and the member directory answer different parts of the question. Our focus in assessing a network concern is the representation made to the agency, the provider relationships behind it and what the organization knew when it made that representation.

The Corporate Settlement and the Separate Officer Payment

Freedom’s corporate settlement covered both alleged schemes. Its former chief operating officer separately agreed to pay $750,000 over his alleged role in the network-expansion scheme.

The HHS Office of Inspector General’s settlement entry lists the combined amount as $32,445,593.

The resolution also included a corporate integrity agreement with Freedom Health and Optimum HealthCare. In the settlement announcement, the agency described the agreement as addressing compliance issues specific to Medicare Advantage plans and reducing risks to patients and taxpayers.

When a Provider Supplies the Codes

HealthCare Partners illustrates how the diagnosis-to-payment chain can begin outside the insurer. In its 2018 settlement announcement, the Justice Department described allegations that the physician organization found additional diagnoses in patient records and sent them to Medicare Advantage organizations to obtain higher payments. It also allegedly ignored inaccurate codes that should have been deleted, lowering reimbursement or requiring repayment.

That is the one-way chart review pattern: findings that raise revenue move forward, while findings that reduce it do not. The provider holds the clinical records. The plan submits data used to obtain the government payment. An insider may know what happened at either end of that exchange.

Freedom’s case adds a separate question about the plan’s own growth. Alongside the diagnosis data, the government challenged representations about the network offered in an expansion application. A review focused only on coding would leave that part of the case unexplained.

What a Plan Insider Can Bring to the Case

The former employee who brought the Freedom case exposed allegations spanning payment data and provider-network representations. Those are different windows into the same business. A coder may understand why a submitted diagnosis lacks support. A contracting employee may understand why the provider information in an application fails to reflect the network behind it.

We work with the connection between those operational facts and the plan’s statements to the government. On the coding side, that means understanding the medical documentation, the diagnosis submitted and its effect on payment. On the network side, it means understanding the provider relationships, what the expansion application represented and the decisions behind that account. Your knowledge of how those records were created can explain a mismatch the finished submission conceals.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know the Data Behind the Plan’s Promise

If you know how unsupported diagnoses reached a payment submission or how a provider network was presented to win expansion, speak to one of our whistleblower experts about what you saw. We build your strongest Medicare Advantage whistleblower case around the decisions inside the plan and bring in Medicare Advantage fraud whistleblower lawyers who understand healthcare payment data and network representations. We stay beside you as your industry knowledge becomes the foundation of the case.