March 20, 2026
According to a press release by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, Aetna Inc. has agreed to pay $117.7 million to settle allegations that it violated the False Claims Act. The government’s allegations centered around the submission of improper diagnoses codes to CMS for its Medicare Advantage beneficiaries. The settlement supports our forecast that the government would continue to scrutinize Medicare Advantage billing practices and risk-adjustment coding in 2026. WLC partner Erica Hitchings recently spoke on the topic.
Some private insurance companies (MA Plans) contract with the Centers for Medicare & Medicaid Services (CMS) to provide Medicare-covered benefits to eligible beneficiaries. These Medicare Advantage, or Part C, plans offer an alternative to traditional Medicare.
Under this arrangement, CMS pays MA Plans a fixed, or “capitated,” monthly amount for each enrolled beneficiary. Because beneficiaries’ healthcare needs vary, CMS adjusts these payments through a process called “risk adjustment”. Risk adjustment is designed to ensure that payments more accurately reflect the anticipated cost of providing care based on each enrollee’s health conditions.
Simply put, MA Plans that enroll sicker beneficiaries—those expected to require more medical care—receive higher payments. MA Plans insuring healthier individuals receive lower payments. This system is intended to promote fairness and prevent insurers from avoiding sicker patients with higher medical costs.
The allegations were brought to light in 2024 by a former Aetna risk adjustment coding auditor. The auditor filed a whistleblower complaint under the qui tam provisions of the False Claims Act. In the complaint, the whistleblower alleged that Aetna knowingly submitted diagnosis codes of morbid obesity for individuals whose recorded BMI was inconsistent with a diagnosis of morbid obesity.
In addition, the government claimed Aetna implemented a “chart review’ program during the 2015 payment year to retroactively review beneficiaries’ medical records. The company hired diagnosis coders to analyze charts and submit additional diagnoses codes to CMS. The government alleged that Aetna selectively added codes that increased reimbursement while failing to remove unsupported codes that would have reduced payments.
Of the total $117.7 million settlement, approximately $106.2 million resolves allegations related to inaccurate diagnoses codes generally. The remaining $11.5 million addresses claims that Aetna improperly billed CMS using untruthful obesity diagnosis codes between 2018 and 2023. The whistleblower received approximately $2 million of the settlement proceeds as the relator’s share award.
Fighting Medicare Advantage (Medicare Part C) fraud remains a government priority. We represent whistleblowers nationwide in bringing False Claims Act cases including those alleging Medicare Advantage and other types of healthcare fraud. If you have information about possible Medicare Advantage fraud, please contact us for a free consultation. We have the expertise and desire to help.