Aetna Reaches $117.7M Settlement in False Claims Act Violation

Aetna Inc. has agreed to pay $117.7 million to resolve allegations that it violated the False Claims Act by submitting or failing to withdraw inaccurate diagnosis codes for Medicare Advantage (MA) enrollees, resulting in inflated payments from the Centers for Medicare & Medicaid Services (CMS).

The settlement was announced by United States Attorney David Metcalf in the Eastern District of Pennsylvania.

Background: Risk Adjustment in Medicare Advantage

Under Medicare Advantage (Part C), CMS pays private insurers—known as Medicare Advantage Organizations (MAOs)—a fixed monthly amount per enrollee. These payments are risk-adjusted based on beneficiaries’ documented health conditions. MAOs receive higher payments for members expected to incur higher healthcare costs due to documented diagnoses.

CMS relies on diagnosis codes submitted by MAOs to determine appropriate reimbursement levels.

Allegations Related to 2015 Chart Reviews

The government alleges that for payment year 2015, Aetna operated a chart review program that retrospectively reviewed medical records to identify additional diagnoses that could support increased payments from CMS.

According to the United States:

• Aetna submitted additional diagnosis codes identified through chart reviews to obtain higher reimbursement.
• The chart reviews also revealed instances where previously submitted diagnosis codes were not substantiated by medical records.
• Aetna allegedly failed to delete or withdraw unsupported diagnosis codes, which would have required repayment to CMS.
• The government contends that Aetna used chart reviews to identify opportunities for additional payments while failing to act on information indicating overpayments.

Of the total settlement amount, $106.2 million resolves these allegations.

Morbid Obesity Coding Allegations (2018–2023)

The remaining $11.5 million addresses allegations that between payment years 2018 and 2023, Aetna knowingly submitted or failed to delete unsupported diagnosis codes for morbid obesity. The government alleged that certain beneficiaries’ recorded body mass index (BMI) values were inconsistent with a diagnosis of morbid obesity.

This portion of the settlement resolves a whistleblower lawsuit filed under the False Claims Act’s qui tam provisions. The whistleblower, a former Aetna risk-adjustment coding auditor, will receive $2,012,500 as part of the recovery. The case is captioned United States ex rel. Mary Melette Thomas v. Aetna Inc., et al., No. 24-cv-339 (E.D. Pa.).

Government Response

Federal officials emphasized the importance of accurate risk adjustment reporting in Medicare Advantage.

The Department of Justice stated that insurers that knowingly submit unsupported diagnoses to inflate reimbursement will be held accountable. The Department of Health and Human Services Office of Inspector General (HHS-OIG) similarly underscored the importance of protecting Medicare Advantage program integrity and taxpayer funds.

Broader Enforcement Context

The case reflects continued federal scrutiny of Medicare Advantage risk-adjustment practices. The False Claims Act remains a central enforcement tool in addressing alleged fraud, waste, and abuse involving government healthcare programs.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Key Takeaways

• Risk adjustment remains a top enforcement priority. Federal authorities continue to scrutinize diagnosis coding and documentation practices in Medicare Advantage.
• Chart review programs carry compliance risk. Retrospective reviews used to identify additional diagnoses may also create exposure if unsupported codes are not withdrawn.
• Documentation must support all submitted diagnoses. Unsupported or inconsistent clinical data—including BMI values tied to obesity diagnoses—can trigger significant liability.
• Whistleblower activity is active in MA oversight. Internal coding auditors and compliance staff remain key sources of False Claims Act cases.
• Financial exposure can span multiple payment years. Allegations in this case covered both a single payment year (2015) and a multi-year period (2018–2023).

Reference

Aetna agrees to pay $117.7 million to resolve allegations that it violated the False Claims Act by submitting or failing to correct inaccurate diagnoses for Medicare Advantage enrollees. U.S. Attorney's Office, Eastern District of PA. Press Release. Published March 10, 2026. Accessed March 10, 2026. https://www.justice.gov/usao-edpa/pr/aetna-agrees-pay-1177-million-resolve-allegations-it-violated-false-claims-act