Aetna, a CVS Health subsidiary, has agreed to pay $117.7 million to resolve allegations that it submitted inaccurate diagnosis codes for Medicare Advantage beneficiaries to inflate risk adjustment payments from the federal government.
The settlement, announced by the Department of Justice, resolves a whistleblower lawsuit filed in 2020 by a former Aetna data analyst. The government alleged that between 2014 and 2020, Aetna encouraged providers to add diagnoses that were not supported by medical records — a practice known as 'upcoding' — to increase the capitated payments the company received per patient.
Aetna denied the allegations but said it settled to avoid protracted litigation. 'We remain committed to integrity in our risk adjustment practices,' the company said in a statement.
Whistleblower to receive $21 million
The former employee will receive approximately $21.2 million as her share of the settlement, one of the largest whistleblower awards in a Medicare Advantage case to date.
The settlement is the latest in a series of DOJ actions against Medicare Advantage plans. Similar settlements have been reached with UnitedHealth Group ($450 million in 2024), Humana ($90 million in 2023), and Cigna ($75 million in 2022).
Risk adjustment payments must reflect actual patient health status, not corporate revenue targets. This settlement underscores our commitment to holding Medicare Advantage plans accountable.
Aetna also entered into a five-year Corporate Integrity Agreement with HHS-OIG requiring independent review of its risk adjustment processes.
