Medicare Advantage Spinal Enthesopathy and Sacroiliitis Fraud: A Challenged Diagnosis Gets a Supporting Report

In Medicare Advantage, spinal enthesopathy and sacroiliitis fraud means reporting those conditions for patients who do not have them to increase payments. In the Seoul Medical Group case, the Justice Department alleged that a health plan questioned the spinal enthesopathy diagnoses, and the provider then enlisted a radiology group to create reports that appeared to support them. For a clinician, healthcare coder or auditor, the revealing moment may be what happened after somebody questioned the code.

Medicare Advantage plans receive monthly payments for each enrollee, adjusted for health conditions and other factors. Medicare groups eligible diagnoses into hierarchical condition categories. Each HCC carries a value that can raise the risk score used to calculate that payment. A provider paid a share of the plan’s receipts can benefit from the increase too. The money follows the diagnosis from the practice to the plan and back again.

HealthCare Partners Promoted a Higher-Paying Spinal Code

HealthCare Partners allegedly distributed coding guidance telling physicians to use an improper diagnosis code for a spinal condition because that code increased Medicare reimbursement. The instruction came from the provider organization itself, putting the same coding choice in front of the physicians whose diagnoses supplied the payment data.

The Justice Department’s October 2018 settlement announcement described HealthCare Partners as a California independent physician association. DaVita operated a medical services organization, collected diagnoses from the care it provided, and sent them to Medicare Advantage plans. It received a share of the payments those plans received from Medicare. Both the plan and the provider organization had money at stake in the coding.

HealthCare Partners, doing business as DaVita Medical Holdings, agreed to a $270 million settlement that covered the spinal coding practices and one-way chart-review allegations. DaVita had voluntarily disclosed practices instituted by HealthCare Partners, including the spinal coding guidance.

The same settlement separately addressed a whistleblower’s allegations of one-way chart reviews. HealthCare Partners allegedly searched records for missed diagnoses that would increase payments while ignoring inaccurate codes that should have been deleted. The instruction to choose a higher-paying code and the decision to leave an inaccurate code in place acted at different points in the payment process. In the alleged scheme, Medicare and taxpayers paid the inflated bill.

Spinal Enthesopathy and Sacroiliitis at Seoul Medical Group

Seoul Medical Group allegedly submitted spinal enthesopathy and sacroiliitis diagnoses for patients who had neither condition. The Justice Department described conduct from 2015 to 2021 in its March 2025 settlement announcement.

The department said both diagnoses increased Medicare’s payments to the health plan, which passed a portion of the increase to Seoul Medical. That is the provider incentive in concrete form: the diagnosis raised the plan’s revenue, and the practice shared the benefit.

The civil settlement arose from a qui tam case brought by Advanced Medical Management’s former vice president and chief financial officer.

Radiology Reports After the Plan Asked a Question

Renaissance Imaging Medical Associates allegedly helped Seoul Medical create radiology reports that appeared to support spinal enthesopathy after a Medicare Advantage plan questioned its use. According to that account, the diagnosis came first. The reports to support it came after the plan challenged it.

Seoul Medical Group and its subsidiary Advanced Medical Management agreed to pay $58,740,000 for allegedly causing the submission of false codes for the two spinal conditions, compared with $2,350,000 from Renaissance, the California radiology group accused of conspiring with Seoul Medical in connection with those diagnoses.

For someone inside a radiology practice, the important connection is between the report, the request that produced it and the diagnosis it was used to support. A report’s wording can become consequential well beyond the imaging practice when another organization uses it to justify a diagnosis sent for Medicare payment.

The Justice Department describes the documentation requirement in terms of the patient visit: the diagnosis must have medical-record support and, for an outpatient visit, must have required or affected care, treatment or management. In a spinal diagnosis case, the clinical encounter, the radiology report and the submitted code belong together. Who asked for the report, what it said and how it reached the payment file are questions we examine with the insider.

The Audit Found Overpayments and Proposed Withdrawals

The whistleblower alleged that Advanced Medical Management identified more than $6.7 million in risk-adjustment overpayments for 2015 through mid-2017 and proposed a timetable for withdrawing codes. Seoul Medical allegedly refused even with a dollar figure and a correction plan in front of it.

The whistleblower also alleged that Seoul Medical acquired Advanced Medical Management in June 2018 and removed personnel in an effort to prevent corrections to Seoul Medical’s risk-adjustment coding practices. When the compliance committee flagged coding concerns later that year, Seoul Medical allegedly refused to allow review and audit of charts prepared by its board members.

That sequence gives a whistleblower case something more specific than a disagreement over a diagnosis. The alleged audit identified the exposure. The response identified who could stop that correction.

This is where internal compliance findings matter to the spinal-code inquiry. An audit report shows what the organization learned. A withdrawal proposal shows what someone recommended doing with that knowledge. The submission history shows whether the recommendation ever changed the data Medicare used. We connect those records so the case can explain the decision as well as the diagnosis.

What Actually Reached the Payment File

A spinal upcoding case needs the connection between the patient’s record and the diagnosis used for payment. Coding guidance shows what physicians were asked to report. A radiology request and report show how support was sought. An audit and the response show what happened when someone challenged it. The code sent to the plan, and then to Medicare, completes the account.

The government’s complaint against Anthem illustrates the correction problem with a different condition. It alleged that a chart review failed to substantiate an active lung cancer diagnosis already submitted for payment:

According to the complaint, Anthem used results from that same review to submit three additional diagnoses. The organization acted on the findings that increased payment while leaving the unsupported diagnosis in place.

For a spinal-code whistleblower, that comparison brings the inquiry back to a concrete question: after the diagnosis was challenged, which findings reached the payment system? A clinician may know why the diagnosis was disputed. A coding or finance employee may know what was submitted and what the organization did with the proposed correction. Those accounts can explain different parts of the same decision.

Why the Incentive Reaches Beyond These Providers

The connection between physician coding and insurer revenue extends across Medicare Advantage. Upcoding or Selection? Evidence from Medicare on Squishy Risk Adjustment, a 2015 working paper hosted by Duke University, estimated diagnosis-based risk scores 6% to 16% higher for private Medicare enrollees than those same enrollees would generate in fee-for-service Medicare. It also found higher coding intensity with closer insurer-provider integration.

The paper describes how that incentive can reach a physician’s working day:

In the spinal cases, the government described providers sharing in payments affected by the diagnoses they supplied. The code’s financial value reached the organization directing the coding.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For an insider in health care, the useful starting point is the particular diagnosis, the instruction or objection, and the decision that followed it.

When You Know Why the Diagnosis Stayed

If you saw a spinal diagnosis promoted, a supporting report requested after a challenge, or an audit’s withdrawal proposal stopped, talk with our whistleblower experts about the decision behind the code. We work beside you to build your strongest Medicare Advantage whistleblower case from the clinical records, coding instructions and payment trail. We bring in Medicare Advantage fraud whistleblower lawyers who understand provider and radiology evidence, and stay with you throughout the case.