FBI issues subpoena to Zoom Health Plan over allegations of fraud

By Heather Mack
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The ambitious vision of Portland, Oregon-based Zoom+ to offer a fully integrated, tech-enabled healthcare system under one roof appears to be more than the company could handle. The Federal Bureau of Investigation is looking into allegations of fraud Zoom+ may have committed in effort to avoid losing money from required risk adjustment payments.

Allegedly, Zoom+ retroactively falsified medical claims to get out of the an Affordable Care Act-mandated requirement that decrees health plans with healthy members must pay into a pool to offset the high costs attributed to their sicker members. Online news site Axios broke the story.  Former employees, who spoke on the condition of anonymity, told Axios that numerous Zoom+ employees have either been laid off or are jumping ship on their own accord.

The company – which was founded in 2006 and offers an app-enabled, integrated health plan comprised of several walk-in clinics, telemedicine services and health insurance– caters to a young, healthy millennial market (the average patient age is 34), meaning their risk pool was already relatively easy to manage. But the company may have tampered with claims to make it appear that they were caring for more sick people than they actually were, thereby driving down their risk adjustment payments.

For example, in situations where a person with Zoom health insurance goes to a Zoom doctor, all of the money goes to Zoom. In that case, the doctor charges a certain rate and insurance pays a discounted version of that. But a former employee said Zoom CEO Dave Sanders directed staff to retroactively jack up the reimbursement rate to the full amount (as well as altering diagnoses) so it appeared Zoom was treating a sicker population and spending more of its own money.

It’s not the first time the company has drawn scrutiny or criticism. Last summer, Sanders spoke about challenges in pursuing their “full-stack” approach to healthcare because of regulatory conflicts. At last count, the company listed some 2,500 members on their health plan and around 400,000 people using their various care facilities and services, but that could dwindle sharply. In April, Oregon state regulators placed Zoom+ under supervision following the company’s announcement that they would step out of individual and small group markets beginning 2018. A lobbyist for the company cited instability in national health policy that created additional risks to small insurers.  

Similar challenges have also befallen other innovators in the space.  Tech-forward health insurance startup Oscar Health announced plans to pull out of a couple markets last year, citing “uncertainties” that would make it difficult to operate, Oscar officially retreated from two Affordable Care Act-based individual market plans in Dallas-Fort Worth, Texas and New Jersey on January 1, 2017.

MobiHealthNews has reached out to Zoom+ for comment and will update if we hear back.