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In a significant development for the healthcare insurance industry, Aetna Inc. has agreed to pay $117.7 million to settle allegations that it violated the False Claims Act by manipulating diagnosis codes for Medicare Advantage Plan enrollees. The Pennsylvania-incorporated national insurer was accused of submitting inaccurate information to increase payments received from Medicare.
The settlement addresses claims that Aetna submitted false patient diagnosis data to the Centers for Medicare & Medicaid Services (CMS) to inflate risk adjustment payments, failed to withdraw incorrect diagnosis information, and falsely certified in writing that the submitted data was accurate and truthful.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division emphasized the gravity of the case, noting, “The government pays private insurers over $530 billion each year to care for Americans enrolled in Medicare Advantage. We will continue to hold accountable insurers that knowingly submit inaccurate or unsupported diagnoses to improperly inflate reimbursement.”
The Medicare Advantage Program, also known as Medicare Part C, allows beneficiaries to opt out of traditional Medicare and enroll in private health plans offered by Medicare Advantage Organizations (MAOs) like Aetna. CMS pays these organizations a fixed monthly amount that varies based on risk factors affecting expected healthcare expenditures for beneficiaries. Generally, MAOs receive higher payments for sicker beneficiaries who are expected to incur greater healthcare costs.
According to the settlement, Aetna operated a “chart review” program for the 2015 payment year in which it paid diagnosis coders to review medical records to identify all supported medical conditions. The company allegedly used these reviews selectively, submitting additional diagnosis codes to obtain more payments while ignoring results that would have required reimbursements to CMS.
The settlement also addresses allegations spanning from 2018 to 2023, during which Aetna reportedly submitted or failed to delete inaccurate diagnosis codes for morbid obesity. Medical records for individuals diagnosed with morbid obesity typically include Body Mass Index (BMI) recordings. The government claims Aetna submitted or failed to withdraw incorrect morbid obesity codes for individuals whose recorded BMI was inconsistent with such a diagnosis, thereby increasing CMS payments.
U.S. Attorney David Metcalf for the Eastern District of Pennsylvania underscored the importance of maintaining program integrity: “When corporations or individuals threaten the Medicare Advantage program by diverting those limited government resources through fraud, waste, or abuse, we will continue to pursue all available remedies against them.”
The case highlighted the critical role of whistleblowers in uncovering potential healthcare fraud. Part of the settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private parties to sue on behalf of the government when they believe false claims have been submitted for government funds. The whistleblower, a former Aetna risk-adjustment coding auditor, will receive $2,012,500 from the settlement.
Acting Deputy Inspector General for Investigations Scott J. Lampert of the Department of Health and Human Services Office of Inspector General (HHS-OIG) emphasized that the settlement demonstrates that “no company is beyond accountability, no matter how large or well known.”
This case represents part of a broader effort by federal authorities to combat fraud in the Medicare Advantage program, which has grown substantially in recent years. The program now covers approximately half of all Medicare beneficiaries, making program integrity increasingly important to protect both taxpayer dollars and the healthcare benefits of millions of Americans.
The resolution resulted from coordinated efforts between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and HHS-OIG.
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9 Comments
It’s good to see the Justice Department taking action on this issue. Accurate data reporting is crucial for the financial integrity and effective administration of the Medicare Advantage program.
I agree. This settlement should serve as a strong deterrent against similar fraudulent practices by other insurers in the future.
This is a significant settlement for Medicare fraud allegations. Insurers need to be held accountable for inflating risk adjustment payments through inaccurate data submissions. It’s important to maintain integrity in the Medicare Advantage program.
While $117 million is a substantial penalty, the scale of the alleged misconduct is concerning. I hope this case encourages other insurers to closely review their data submission practices and strengthen compliance measures.
Well said. Given the massive scale of Medicare Advantage spending, even small discrepancies can add up to significant losses for taxpayers. Rigorous audits and penalties are necessary to deter this type of fraud.
This case underscores the importance of diligent oversight and enforcement to protect government healthcare programs from abuse. Kudos to the DOJ for holding Aetna accountable through this substantial penalty.
Submitting false patient data to boost reimbursements is a serious violation. I’m glad to see the government taking strong action to protect taxpayer funds and ensure honest reporting from Medicare Advantage providers.
Absolutely, transparency and accountability are critical for government healthcare programs like Medicare Advantage. This settlement sends a clear message that fraud will not be tolerated.
This case highlights the need for robust oversight of Medicare Advantage plans. The government must remain vigilant to ensure enrollees receive the care they’re entitled to without providers manipulating the system for profit.