Aetna Pays $117.7 Million as Government Intensifies Medicare Advantage Scrutiny

This month, Aetna Inc. (Aetna) entered into two settlement agreements with the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services, Office of Inspector General (OIG) in which it agreed to pay $117.7 million to resolve False Claims Act (FCA) allegations related to Medicare Advantage (MA) risk adjustment activities. The government alleged that Aetna submitted or failed to delete inaccurate diagnosis codes for enrollees in its MA plan to increase its Medicare payments.

The Aetna settlements are another example of the continued scrutiny that DOJ and OIG are placing on risk-adjustment practices by MA plans that have yielded large settlements. The federal government’s FCA working group, announced last year, identified Medicare Advantage as a key enforcement priority. And as reflected in DOJ’s press release, the size and growth of the MA program — serving over half of all eligible Medicare beneficiaries and accounting for over $530 billion in annual federal spending — make the program a key FCA enforcement priority.

Medicare Advantage Background

Under the MA program, Medicare beneficiaries may elect to receive benefits through private insurers rather than traditional Medicare. The Centers for Medicare & Medicaid Services (CMS) pays these Medicare Advantage Organizations (like Aetna) a fixed monthly amount per member, which is risk-adjusted based on factors that affect expected healthcare costs, including the member’s medical diagnoses. MA plans submit member diagnosis codes to CMS; generally, the sicker a member is, the more CMS pays the MA plan for that member.

The Chart Review Settlement

The first settlement stems from Aetna’s payment year 2015 chart review program, in which Aetna hired coders to review medical records Aetna obtained from its MA enrollees’ healthcare providers. The coders allegedly identified additional diagnoses evidenced by patient medical charts that Aetna submitted to CMS and that yielded higher risk-adjusted payments from CMS. But, according to the government, the chart reviews also revealed something else: instances where healthcare providers had reported diagnosis codes that were not substantiated by the medical records. Rather than investigate or correct the unsupported codes, Aetna left them in place, kept the payments from Medicare, and continued to certify to CMS that its data was “accurate, complete, and truthful.”

To resolve these allegations, Aetna agreed to pay $106,200,000. Aetna does not admit or deny liability. These allegations did not arise from a qui tam action and may reflect DOJ’s internal review of agency data for potential cases without whistleblower involvement.

The Morbid Obesity Diagnoses Settlement

The second agreement arises from a qui tam filed by a former Aetna risk-adjustment coding auditor (United States ex rel. Thomas v. Aetna Inc., et al., No. 24-cv-339 (E.D. Pa.)). The government alleges that from 2018 through 2023, Aetna systematically submitted and failed to delete inaccurate morbid obesity diagnosis codes to inflate its payments from CMS. The misconduct allegedly took two forms. In some cases, Aetna or its contractors added the inaccurate codes during chart reviews, rather than relying on diagnoses made during actual patient exams. In others, Aetna allegedly failed to question obesity codes assigned to members whose body mass index (BMI) fell below the clinical threshold for that diagnosis — meaning the codes were unsupported on their face.

Aetna agreed to pay $11,500,000 to resolve these allegations. The whistleblower received a $2,012,500 share of the settlement. As with the other settlement, Aetna did not admit or deny liability.

No Corporate Integrity Agreement?

Notably, as part of these settlements, Aetna did not enter into a Corporate Integrity Agreement (CIA) with the government. According to OIG, Aetna “refused to agree to compliance-related oversight with HHS-OIG through a CIA” and therefore, as part of the settlement, “OIG reserved the right to exclude Aetna for the alleged conduct.” As a result of Aetna’s refusal, “OIG may use various tools to monitor Aetna’s compliance with the Federal health care programs.” OIG’s website indicates that Aetna will receive “heightened scrutiny” for a duration of 10 years.

Conclusion

For insurers and other entities participating in Medicare Advantage, the Aetna settlements underscore the importance of maintaining robust compliance controls around risk-adjustment activities. In particular, organizations should ensure that chart review programs and other coding initiatives are supported by strong documentation, oversight, and procedures for identifying and correcting unsupported diagnosis codes. As discussed in our summary of OIG’s MA Industry Segment-Specific Compliance guidance, MA organizations that invest in compliance practices will be better positioned to mitigate FCA exposure, withstand regulatory scrutiny, and navigate an increasingly enforcement-driven MA environment.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.