Economic damages in a false claims act case involving HCFA and HMOS

A False Claims Act Case

In a recent case, our economists were asked to analyze economic damages in a False Claims Act case that involved the Health Care Finance Administration (HCFA) of the U.S. Department of Health and Human Services. In this case the plaintiffs alleged that the health care providers were in violation of the their contracts with the U.S. to provide health care services to Medicare participants.

According to the complaint, the defendants are supposed to operate health maintenance organization contracts that require them to enroll any person eligible for Medicare. The plaintiffs allege that the defendants violated this requirement and cherry picked the HMO participants to enroll.

The question: How do you begin to address these economic damages? What data do you need?

Analysis 1: Compare the differences in cost and revenue associated with participants actually enrolled under the HMO's HCFA contracts and the cost and revenue associated with Medicare participants that could have been potentially enrolled under the HMO's HCFA contracts.

This analysis will require a simulation to determine what the revenue would have been had the HMO enrolled from the overall distribution and not allegedly cherry picked the healthy participants.


Analysis 2: Compare the differences between the HCFA cost associated with the participants actually enrolled under the HMO's contract's and the HCFA cost associated with the participants that could have potentially been enrolled under the HMO's contracts with HCFA.

These analyses will include analyses of the potential number of non-enrolled, rural Medicare participants that could have been enrolled the HMO's contracts with HCFA.

Data that is needed:

Specifically, for each participant in the defendant HMO over the relevant time period and geographical regions:

* The capitation rate for each beneficiary/participant in the HMO;
* Cost of providing services to beneficiary/participant in the HMO;
* The factors and/or multipliers that were used to construct the adjusted average per capita cost;
* Number of persons enrolled in the HMO
* Aggregated (preferably disaggregated micro-level data) demographical information for the persons enrolled in the HMO to include the age, gender, Medicaid status, institutional status (nursing home or not), and current working status;
* Select aggregated (preferably disaggregated micro-level data) medical condition information including the number of participants with a prior or current heart condition, average length of stay in the HMO, and a description of services rendered;
* Description of HFCA related data that is maintained by the HMO.;