The United States Attorney for the Southern District of New York announced on June 3 that Community Care Health Network, LLC, doing business as Matrix Medical Network, has agreed to pay $36.5 million to settle a civil healthcare fraud lawsuit. The case involved allegations that Matrix caused Medicare Advantage Organizations to submit false and invalid patient diagnoses, leading to inflated payments from the government.
According to the announcement, Matrix Medical Network admitted in the settlement that it reported certain chronic conditions without sufficient clinical information on its health assessment forms. The company also entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General, requiring annual risk assessments and independent compliance reviews.
U.S. Attorney Jay Clayton said, “For years, Matrix generated false and invalid diagnoses for patients enrolled in Medicare Advantage plans that were later reported to the Government. Matrix advertised its ability to identify new diagnosis codes that would boost Medicare Advantage insurers’ payments, and it delivered on that promise by reporting lucrative diagnoses that frequently fell well short of meeting recognized clinical criteria. Matrix did so to generate business for itself, at the expense of the public fisc.”
Naomi Gruchacz, Special Agent in Charge at HHS-OIG’s New York Regional Office, said, “Matrix manipulated Medicare managed care’s reimbursement structure for financial gain. By generating unsupported and clinically invalid diagnoses, Matrix undermined the integrity of federal health care programs and put profits above patients.”
The complaint alleged that between 2014 and 2019, Matrix knowingly caused MAOs to submit unsupported diagnoses such as proliferative diabetic retinopathy and chronic obstructive pulmonary disease based on in-home assessments conducted primarily by nurse practitioners. These actions led MAOs to receive improper risk adjustment payments from Centers for Medicare & Medicaid Services under rules designed to compensate plans more for sicker beneficiaries.
As part of related proceedings announced by other U.S. Attorneys’ offices on June 3, DPN USA d/b/a HealthFair—a company acquired by Matrix—agreed with its prior owner Shahriah “James” Ekbatani to resolve separate allegations involving unsupported diagnoses from mobile health care bus assessments.
