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Federal health insurance giant Aetna has agreed to pay $117.7 million to settle allegations that it submitted inaccurate diagnosis codes to the Medicare Advantage program, according to a statement released by the Department of Justice on Wednesday.
The settlement resolves claims that Aetna, a CVS Health subsidiary, knowingly submitted or caused false information to be submitted to the Centers for Medicare & Medicaid Services (CMS) between 2011 and 2015, violating the False Claims Act.
Federal investigators alleged that Aetna added diagnosis codes to patient medical records that weren’t supported by proper documentation. These codes allowed the insurer to receive higher reimbursements from the Medicare Advantage program than it was entitled to collect.
“When insurance companies participating in Medicare Advantage inflate the risk scores of beneficiaries to receive higher payments, they undermine the program’s fiscal integrity,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
The Medicare Advantage program, also known as Medicare Part C, allows beneficiaries to receive their Medicare benefits through private insurers rather than directly through the traditional Medicare program. Under this system, CMS pays insurers a set amount per patient, adjusted based on demographic information and health status risk scores.
This risk-adjustment model provides higher payments for patients with more serious medical conditions, creating what critics say is a financial incentive for insurers to maximize diagnosis codes—and by extension, their reimbursements.
Industry analysts note that Medicare Advantage has become increasingly lucrative for private insurers, with enrollment more than doubling over the past decade. The program now covers over 30 million Americans, representing nearly half of all Medicare beneficiaries.
“This settlement reflects our ongoing commitment to ensure that companies that do business with federal healthcare programs follow the rules,” said U.S. Attorney Matthew M. Graves for the District of Columbia.
The case originated from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allows private citizens to sue on behalf of the government and share in any recovery. The whistleblower will receive a yet-undisclosed portion of the settlement.
Aetna, while agreeing to the settlement, did not admit to any wrongdoing. In a statement, the company said it remains “committed to compliance with all applicable laws, regulations and government program requirements.”
This settlement adds to a growing list of similar cases against major insurers participating in Medicare Advantage. In recent years, the Justice Department has intensified scrutiny of the program, resulting in settlements with several large healthcare companies.
Last year, Cigna agreed to pay $172 million to resolve similar allegations, while Elevance Health settled for $5.6 million. UnitedHealth Group, the largest Medicare Advantage provider, has also faced multiple investigations.
Healthcare policy experts suggest these settlements highlight systemic issues within the Medicare Advantage payment model.
“The risk-adjustment payment system creates perverse incentives for insurers,” said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “These cases demonstrate the need for stronger oversight and potentially a redesign of how we pay for Medicare Advantage plans.”
Federal regulators have responded by enhancing auditing procedures and proposing rule changes aimed at tightening documentation requirements and reducing overpayments.
The settlement comes at a time when Medicare Advantage faces increased regulatory attention. Earlier this year, the Biden administration announced plans to recover an estimated $4.7 billion in overpayments to Medicare Advantage plans over the next decade.
Industry groups have pushed back against these efforts, arguing that additional regulations could reduce benefits for seniors or increase premiums.
As Medicare Advantage continues to grow in popularity and cost, experts predict continued tension between the government’s need to control spending and insurers’ desire to maximize reimbursements in what has become one of healthcare’s most profitable sectors.
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13 Comments
This settlement is a reminder that healthcare providers and insurers must be held accountable for their reporting and billing practices. Maintaining the integrity of the Medicare Advantage program is essential for protecting taxpayer funds and ensuring quality care.
This case underscores the need for robust oversight and auditing of Medicare Advantage plans. While the program provides valuable options, we must ensure participating insurers adhere to program rules and don’t unfairly inflate costs. Transparency is key.
This settlement is a reminder that we must remain vigilant against attempts to game the system and inflate Medicare costs. Responsible stewardship of taxpayer funds should be a top priority for all healthcare providers and insurers.
Well said. Maintaining the program’s fiscal integrity is essential for its long-term sustainability.
It’s good to see the DOJ take action against fraudulent billing practices in Medicare Advantage. Taxpayers deserve to know their healthcare dollars are being used responsibly. Hopefully, this sends a strong message to deter future abuse.
The Aetna case demonstrates the importance of rigorous auditing and oversight of Medicare Advantage plans. Inflating risk scores to boost reimbursements is unacceptable and undermines the program’s purpose. Strong enforcement is needed to deter future misconduct.
The DOJ’s action in this case sends a clear signal that fraudulent billing practices in Medicare Advantage will not be tolerated. Insurers must be held accountable for their reporting and reimbursement practices.
While the settlement amount is substantial, the broader implications are even more important. This case highlights the need for ongoing scrutiny of Medicare Advantage plans to ensure accurate reporting and appropriate use of public funds.
This settlement is a win for taxpayers and Medicare beneficiaries. Ensuring the Medicare Advantage program operates with integrity is crucial for maintaining trust and providing quality care. Continued vigilance is required to root out abuse.
The $117.7 million settlement with Aetna is a significant enforcement action. Medicare Advantage is an important program, but it requires diligent monitoring to prevent improper payments. Insurers must be held accountable for accurate reporting.
Kudos to the DOJ for pursuing this case and recovering funds on behalf of taxpayers. Ensuring the integrity of Medicare Advantage is critical, as the program plays a vital role in providing healthcare coverage to millions of Americans.
I agree, strong enforcement is needed to deter fraud and maintain trust in the Medicare Advantage program.
This settlement highlights the importance of ensuring Medicare Advantage plans accurately report patient data and diagnoses. Inflating risk scores to receive higher reimbursements undermines the program’s integrity. Vigilance is needed to prevent such abuses.