Florida Blue has claimed in a legal document that it was overbilled by $25 million by The Villages Health, thanks to so-called medical “coding errors.” Florida Blue also claims those “errors” were actually a “scheme.”
It’s the latest revelation in the ongoing legal and financial saga surrounding the bankrupt health care provider founded by The Villages.
Blue Cross and Blue Shield of Florida, known by its trade name Florida Blue, offers various health insurance plans for residents of The Villages. Florida Blue is alleging that it was overbilled by The Villages Health which “falsely added” two specific diagnoses into patient files – “Coagulation Defects and Other Specified Hematological Disorders” and “specified Heart Arrhythmia.”
Florida Blue charges that the coding errors, in reality, turned out to be “a four years’ long scheme to add diagnostic codes to patient files.” Florida Blue charges that the coding errors have cost it $25 million.
Florida Blue has scoured the data and concluded that in 2024 alone, The Villages Health’s “misconduct resulted in thousands of diagnostic codes that should not have been included in patient files and a corresponding overpayment of approximately $8 million,” according to a document filed this week in U.S. Bankruptcy Court. Florida Blue says that “this miscoding also extended into payment years 2023, 2022, and 2021, as well continuing in payment year 2025.”
Furthermore, Florida Blue claims that The Villages Health had promised to “provide the data necessary for Florida Blue to calculate the amount of overpayment for those years,” but suddenly filed for bankruptcy before delivering the data. UnitedHealthcare, which sold Medicare Advantage plans for many years as a partner with The Villages Health, also has said it was stunned by the sudden bankruptcy announcement made in July by The Villages Health CEO Bobby Trinh. He collected a $200,000 retention bonus one day before sending a letter to all 55,000 patients of The Villages Health, assuring them their care would continue despite the bankruptcy.
UnitedHealthcare has pointed the finger of blame directly at the Morse family, and says that as the owners of The Villages Health, the Morse family raked in millions of dollars. The Villages Health paid out in a “three-year period from 2022 to 2024, a very substantial portion of $183 million, consisting of $64.2 million in ‘tax-related distributions’ and $118.8 million to pay down a supposed ‘line of credit with its major shareholder’ – to members of the Morse family, who own and control The Villages through various corporate entities.” UnitedHealthcare also charges that The Villages Health “claims not to know” how much money it distributed to shareholders in 2020 and 2021. UnitedHealthcare further contends that the $118.8 million purportedly spent paying down the line of credit was actually “disguised equity distributions” paid to the Morse family. During those years, The Villages Health also was paying roughly $10 million in annual rent to The Villages Operating Co. for the use of the clinics.