Aetna Settles Medicare Advantage Fraud Allegations for $117.7 Million

Aetna Inc., a Pennsylvania-based insurer, has agreed to a $117.7 million settlement to resolve allegations of submitting inaccurate diagnosis codes under the Medicare Advantage program. This settlement addresses claims that Aetna provided false medical data to the Centers for Medicare & Medicaid Services (CMS) to enhance payments for enrollees in its Medicare Advantage plans.

Medicare Advantage, or Medicare Part C, allows beneficiaries to join private health plans instead of traditional Medicare. CMS compensates these Medicare Advantage Organizations (MAOs) with a fixed monthly rate, adjusted based on each beneficiary's risk factors. Accurate diagnosis code submissions are essential for appropriate risk adjustment, as increased payments are made for those with anticipated higher healthcare costs due to illness.

The United States alleges that Aetna failed to adjust or retract erroneous diagnosis data, which led to inflated risk adjustment payments from CMS. Assistant Attorney General Brett A. Shumate emphasized the need for accurate and supported medical reporting to ensure fair reimbursement. Allegations indicate Aetna engaged in practices that misrepresented diagnosis information, particularly regarding morbid obesity, from 2018 to 2023.

This case came to light through a whistleblower lawsuit under the False Claims Act, with a former Aetna coding auditor playing a crucial role. The whistleblower is set to receive $2,012,500 from the settlement. The resolution involved collaboration among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and the Department of Health and Human Services Office of Inspector General (HHS-OIG). This settlement underscores the government's commitment to combat fraudulent activities in healthcare, although it does not determine liability.