DOJ Continues to Prioritize Medicare Advantage Enforcement with $22.5 Million Settlement
On September 30, 2026, the Department of Justice announced a $22.5 million settlement with a Medicare Advantage (“MA”) plan to resolve allegations that it violated the False Claims Act by failing to withdraw inaccurate diagnosis codes for enrollees and improperly retaining resulting overpayments from Medicare. As previously reported, MA fraud is a top priority for FCA enforcement in this Administration, and the settlement is the latest in a string of recent resolutions we covered here and here.
Under the MA program, the Centers for Medicare & Medicaid Services (“CMS”) makes capitated monthly payments to MA plans that are risk-adjusted based on beneficiaries’ expected healthcare costs. Because diagnosis codes affect those risk-adjusted payments, MA plans submit diagnosis data to CMS and annually certify that the data is accurate, complete, and truthful.
According to the government, for payment years 2017 through 2021, the plan operated a “one way” retrospective chart review program in which nurse reviewers examined medical records to identify risk-adjusting conditions supported by the records. The plan allegedly used the reviews to submit additional diagnosis codes that could increase CMS payments but did not withdraw all previously submitted diagnosis codes that the same reviews did not substantiate. DOJ alleged that the plan submitted false annual certifications concerning the accuracy and truthfulness of its risk-adjustment data and retained overpayments.
The allegations were originally raised in a qui tam action filed by a former employee, who will receive $3.825 million as her share of the settlement. In addition to the conduct covered by the settlement, the complaint alleged that the plan used additional programs to identify diagnosis codes for submission to CMS, including obtaining data from providers’ electronic medical record systems and submitting additional codes to CMS without confirming whether the codes were supported by the beneficiaries’ medical records.
A copy of the settlement agreement can be found here, and a copy of the complaint can be found here.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.
