Novel Medicare Advantage Fraud Theory Falters in HealthSun Case

Prosecutors offered surprisingly little evidence to support their theory of fraud in their failed attempt to convict former HealthSun Health Plans Inc. coding supervisor Kenia Valle Boza last week, attorneys familiar with the case say.

The case accusing the employee of the Florida-based insurance provider was closely watched as one of only a handful of criminal prosecutions for alleged Medicare Advantage fraud that was premised on risk-adjustment upcoding.

“I think DOJ wanted to use this case to send some sort of a message to the Medicare Advantage community,” said McDermott Will & Emery partner Franklin Monsour Jr., one of Valle Boza’s lawyers. “The problem is they picked a case where the defendant was completely innocent.”

Medicare Advantage plans, also known as Medicare Part C plans, involve private insurers receiving fixed, per-patient payments based on a patient’s health condition. Risk adjustment upcoding—a form of Medicare fraud—occurs when the severity of a patient’s medical conditions are exaggerated in order to increase those payments.

Medicare reimbursement is far more complicated with these types of plans than it is in the fee-for-service context, and prosecutors don’t yet have a playbook for investigating and proving these kinds of cases.

Valle Boza was charged in the US District Court for the Southern District of Florida with one count of conspiracy to commit health care fraud and wire fraud, two counts of wire fraud, and three counts of major fraud against the US. The jury found her not guilty June 13 after four hours of deliberation.

The Justice Department declined to prosecute HealthSun or its parent, Elevance Health Inc., after the company self-disclosed the misconduct and agreed to repay about $53 million in overpayments.

“This verdict underscores the difficulty in prosecuting individuals for healthcare fraud in corporate cases,” said McGovern Weems partner and former federal prosecutor Scott Armstrong. “These cases will always be an uphill battle for the government.”

Educating the Jury

Valle Boza’s defense team had to educate the jury about what was really going on because of holes in the government’s case, Monsour said.

The defense often entered more evidence through cross examination than the prosecution was entering on direct, he said. And frequently, defense attorneys were working to admit the government’s own exhibits.

“That doesn’t happen” in other criminal cases, said Fridman Fels & Soto PLLC partner Adam Fels, who also represented Valle Boza.

Federal prosecutors are seldom put to the test in this manner, as the vast majority of criminal defendants take a plea deal to avoid the risk of a guilty verdict and harsher sentence following trial. But when they do take cases to a jury, they usually win.

Still, seasoned defense lawyers tracking Valle Boza’s case weren’t surprised by her acquittal.

“The government’s motive theory was not credible,” said Miami-based white collar defense attorney Marissel Descalzo of Tache, Bronis and Descalzo PA.

In its closing argument, the government repeatedly talked about how healthcare fraud can be understood simply as “lies for money.”

But according to evidence at trial, Valle Boza was salaried and so received no direct benefit from the upcoding scheme she allegedly orchestrated.

The only incentives the government alleged she had were pay raises and promotions. It didn’t bother to do a market rate analysis, Monsour said, noting that she was actually getting paid below market compensation.

“I cannot imagine a jury of working-class citizens would believe that an employee would risk prison time in exchange for a job paying below average,” Descalzo said.

The Justice Department didn’t respond to Bloomberg Law’s request for comment.

Undermining Intent

Internal HealthSun email correspondence—offered into evidence by the defense—showed that Valle Boza sought, obtained, and shared guidance on when to properly use the diagnosis codes in question.

The email showed Valle Boza’s boss had taken months to respond to her inquiry, and that she immediately sent the guidance to her coders when it came.

That undermines the entire notion that was engaged in fraud, Monsour said.

The government’s theory of falsity was that Valle Boza improperly directed subordinate coders to enter certain diagnosis codes whenever a patient’s lab work showed an elevated hemoglobin A1C, and that they improperly used physician login credentials to add diagnoses to patient medical records.

But the fact that a coder entered a diagnosis doesn’t make the diagnosis false. Medicare risk adjustment guidelines say all diagnosis codes submitted must be part of a face-to-face visit with a doctor—they don’t say who can enter a diagnosis, Fels said.

And importantly, physicians ultimately signed off on the coders’ notes.

Experts for the defense testified that a doctor takes ownership of a medical record when they sign it.

“A doctor can’t scapegoat a coder and say ‘I didn’t put that there,’” Monsour said.

The government also failed to contend with expert testimony about how, before there was a diagnosis code for prediabetes, it wasn’t uncommon for physicians to use the challenged diagnoses to capture a patient’s elevated A1C, Monsour said.

It’s possible the government relied too heavily on data and documentation provided to them as part of HealthSun’s self-disclosure when deciding whether to prosecute Valle Boza, Monsour said.

“I think when the government conducted its own investigation and interviewed witnesses, it lacked the knowledge of certain questions to ask and at some point, refused to ask the questions it should have,” he said.

The case is United States v. Valle Boza, S.D. Fla., No. 1:23-cr-20417, 6/13/25.