Aetna Settles $117.7 Million in Medicare Advantage False Claims Act Allegations
Aetna Inc. has reached two settlement agreements totaling $117.7 million with the U.S. Department of Justice (DOJ) and the Office of Inspector General (OIG) under the U.S. Department of Health and Human Services. These settlements resolve allegations made under the False Claims Act related to risk adjustment practices within the company's Medicare Advantage (MA) program. The allegations suggest Aetna submitted or did not correct inaccurate diagnostic codes, resulting in increased payments from Medicare.
These settlements highlight the ongoing focus of federal authorities on risk adjustment methodologies employed by MA plans, with significant repercussions for entities involved. Medicare Advantage, which provides beneficiaries the option to receive benefits through private insurers, remains a critical area due to its extensive reach and financial implications—serving over half of Medicare beneficiaries and representing more than $530 billion of annual federal expenditures.
The MA model involves fixed monthly payments to insurers for each enrollee, adjusted based on expected healthcare costs, including diagnostic data. Aetna's first settlement relates to findings from its 2015 chart review campaign. Coders reviewed medical records to identify additional diagnoses that led to higher CMS payments. However, it was also found that some diagnosis codes were not substantiated by the records, and Aetna allegedly did not take corrective action, continuing to certify data accuracy to CMS. For this, Aetna will pay $106.2 million to settle the charges without admitting wrongdoing.
The second settlement, linked to a whistleblower lawsuit initiated by a former risk adjustment coding auditor, involves accusations that Aetna, from 2018 to 2023, improperly added morbid obesity diagnosis codes and did not amend unsubstantiated codes based on body mass index (BMI) data. The legal resolution includes an $11.5 million payment from Aetna, with the whistleblower receiving over $2 million from the settlement.
Interestingly, while settling these claims, Aetna opted out of entering a Corporate Integrity Agreement with the government, a move allowing the OIG to exclude Aetna from federal health programs if necessary, pending continuous monitoring. OIG has announced increased scrutiny of Aetna’s activities over the next decade.
These events emphasize the necessity for MA organizations to implement stringent compliance measures, especially regarding risk adjustment operations. Having strong documentation and correction protocols can significantly reduce exposure to FCA claims, with organizations that prioritize compliance better equipped to handle enforcement actions in an increasingly regulated Medicare Advantage landscape.