Aetna has agreed to pay $117.7 million to resolve federal allegations that it improperly inflated Medicare Advantage payments by submitting inaccurate diagnosis codes and failing to correct them when unsupported by medical records.
The settlement, brought under the False Claims Act by the U.S. Department of Justice, centers on risk-adjustment practices used to determine payments from the Centers for Medicare & Medicaid Services (CMS). Under this model, insurers receive higher payments for members with more serious documented conditions.
According to the government, Aetna identified additional diagnoses through chart reviews and submitted those codes to increase payments, but did not consistently remove them when internal reviews later found insufficient documentation. A significant portion of the settlement—over $100 million—is tied to these practices for the 2015 payment year.
Additional allegations involve the submission of unsupported diagnoses related to morbid obesity between 2018 and 2023, including cases where patient data did not align with the condition. This portion of the case originated from a whistleblower lawsuit, with the individual receiving a share of the settlement.
The agreement comes amid increased federal scrutiny of Medicare Advantage risk-adjustment practices, following other high-profile enforcement actions across the industry.
Aetna has stated it disagrees with the allegations but chose to settle to avoid prolonged litigation, emphasizing that the resolution does not constitute an admission of liability.
For providers and payers, the case highlights the continued focus on documentation accuracy and compliance in risk-adjusted payment models.
Resource: Aetna to pay $118M to resolve Medicare Advantage upcoding allegations