October 1, 2026
At the beginning of 2026, we predicted that Medicare Part C Fraud would remain one of the leading areas of False Claims Act enforcement this year. Nine months and nearly $1.3 billion later, that prediction has been borne out.
The Department of Justice announced approximately $1.3 billion in Medicare Part C-related False Claims Act settlements in 2026. The settlements involve not only some of the nation’s largest insurers in the program, but also provider groups, home health assessment companies, and other other vendors.
Medicare Part C, also known as Medicare Advantage (MA), allows Medicare beneficiaries to receive their benefits through private health plans rather than through traditional fee-for-service Medicare. The federal government pays MA plans a fixed monthly amount for each enrolled beneficiary.
CMS adjusts those payments based on each beneficiary’s health status through a process known as “risk adjustment.” Plans generally receive higher payments for beneficiaries with more serious health conditions, or higher “risk scores.” This is because\ those patients are expected to require more costly care. As a result, entities operating in the MA industry can inflate these risk scores to maximize payments. When insurers submit unsupported or inaccurate diagnosis codes, the taxpayers foot the inflated bill.
MA fraud isn’t confined to the companies that ultimately submit diagnosis data to CMS. Medicare Advantage operates through a complex network of downstream entities — including physicians and coding companies — many of whom have direct financial incentives tied to the risk scores of Medicare Advantage beneficiaries, creating pressure to manipulate patient data.
Over half of Medicare beneficiaries are now enrolled in an MA plan. The program cost taxpayers a whopping $534 billion in fiscal year 2025. As the dollar amounts involved have grown, so too has the government’s enforcement effort, culminating in 2026 as a historic year for recoveries.
The year began with a record-setting resolution. As we noted in January, Kaiser Permanente affiliates agreed to pay $556 million to resolve allegations that they violated the False Claims Act by pressuring physicians to add diagnoses to patient records after visits. Kaiser tied physician and facility compensation to meeting risk-adjustment scores, resulting in an end-of-year “rush” to amend records. The settlement is the largest Part C risk-adjustment fraud settlement to date.
Just two months later, we covered the news that Aetna agreed to pay $117.7 million to resolve Medicare Part C fraud allegations. The government alleged that Aetna used chart reviews to capture additional diagnoses that would increase their payments from the government. At the same time, Aetna did not delete diagnoses that the same review process had shown were unsupported.
Later, in September, Blue Cross agreed to pay $22. 5 million to resolve allegations that it submitted inaccurate diagnosis codes to the Medicare program, and later failed to retract them after chart reviews exposed their mistake.
In June, home health companies Matrix Medical Network and HealthFair agreed to pay $56.5 million to resolve their own Medicare Part C fraud allegations. In that matter, the government and whistleblowers alleged that the companies generated diagnosis codes lacking adequate support and often contradicted by test results.
As the summer came to a close, two Medicare Part C fraud settlements underscored that downstream entities are on the government’s radar.
Complete Health Partners Holdings agreed to pay $14.1 million to resolve allegations that it pressured physicians to add unsupported mental-health diagnoses to patient records, boosting payments from MA plans. Complete Health, a provider group, operates under “risk-sharing” arrangements with insurers, receiving a percentage of the premiums insurers collect from the government — which the government alleged gave the company a financial incentive to make its patient population appear sicker than it was.
That same month, The Villages Health System — another risk-sharing entity — agreed to a $541.5 million settlement arising from invalid diagnosis codes submitted to multiple Medicare Advantage organizations. While most of the settlements above came in whistleblower lawsuits, the Villages resolution stemmed from a voluntary self-disclosure.
Earlier this year, we discussed new HHS-OIG compliance guidance which flagged risk adjustment as a major vulnerability in the MA program. It pointed to several specific practices as high risk, including the use of unsupported diagnosis codes, misusing chart reviews to mine for additional diagnoses, and misaligned incentives for downstream vendors. The Guidance is a compelling (and on-point) read. Each of these risk factors appeared within the fact patterns of the cases described above!
With several months remaining in 2026 and significant Medicare Advantage litigation still ongoing, there is every reason to expect Medicare Advantage fraud to remain a major area of FCA enforcement.
Whistleblowers have been central to the development of Medicare Part C fraud enforcement this year.
Multiple whistleblowers brought False Claims Act actions behind the Kaiser resolution. A former risk-adjustment coding auditor brought forward the Aetna allegations. Insiders filed the qui tam actions behind the Matrix and HealthFair settlements, and a whistleblower lawsuit likewise drove the Complete Health matter.
These cases demonstrate why insiders can be particularly important in Medicare Advantage fraud matters. Coding programs, chart-review practices, internal financial incentives, compliance warnings, and risk-sharing arrangements can be difficult for the government to identify from payment data alone. Employees and other insiders can provide the context necessary to explain how those systems actually operate.
Whistleblower Law Collaborative has extensive experience representing whistleblowers in Medicare Advantage and other health care fraud matters. If you have information concerning potentially fraudulent Medicare Advantage practices, please contact us for a free and confidential consultation.