On March 11, 2026, the Department of Justice announced the latest in a long line of Medicare Advantage fraud settlements against MAOs—this time with Aetna, which agreed to pay $117.7 million to resolve False Claims Act allegations involving risk adjustment practices. This case is part of DOJ’s ongoing focus on Medicare Advantage “upcoding”—that is, making patients appear sicker than they are by adding unsupported diagnoses to inflate their risk scores (a.k.a. RAF scores) to increase government reimbursement.
Under the Medicare Advantage program, CMS pays insurers a fixed monthly amount per beneficiary, but that amount is adjusted based on the patient’s health status. The sicker the patient, the higher the payment. So diagnosis codes matter—a lot. According to the government, Aetna “submitted inaccurate and untruthful patient diagnosis data…to inflate the risk adjustment payments it received” and then failed to correct those inaccuracies or return overpayments.
There were two primary schemes alleged. First, for payment year 2015, Aetna conducted what is known as a retrospective chart review program. The company hired coders to comb through medical records and identify additional diagnoses that could justify higher payments. That, in itself, is not unlawful. But here’s the problem: when those same chart reviews showed that previously submitted diagnoses were unsupported, Aetna allegedly ignored that information and did not delete those codes—even though doing so would have required repayment to CMS. In other words, Aetna allegedly used chart reviews as a one-way ratchet: adding codes that increased revenue, while disregarding information that would decrease it.
Second, as raised in a separate whistleblower complaint, from 2018 through 2023, Aetna allegedly submitted—or failed to delete—diagnosis codes for morbid obesity that were not supported by patients’ medical records. For example, Aetna allegedly reported morbid obesity diagnoses even where patients had body mass index values below 30, which is inconsistent with that diagnosis. These practices, the government alleges, resulted in inflated payments from Medicare. As the whistleblower’s attorney noted “[i]t’s unfair to patients to be coded as morbidly obese when they’re not and it’s unfair to the government to pay for medical care for conditions that don’t exist.”
The qui tam case was brought by whistleblower Mary Melette Thomas, a former Aetna risk-adjustment coding auditor—someone whose job put her in a position to see these practices firsthand—and underscores how critical insiders are to uncovering fraud in complex payment systems like Medicare Advantage. For her role in bringing the case forward, she will receive approximately $2.01 million as her share of the recovery.
This settlement does not stand alone. It is the latest in a long line of DOJ enforcement actions against Medicare Advantage organizations for risk adjustment fraud, including successful settlements achieved with the help of Whistleblower Partners’ clients Dr. James Taylor ($556M settlement with Kaiser Permanente) and Teresa Ross (up to $100M settlement with Independent Health and Betsy Gaffney and $6.375M settlement with Group Health Cooperative). Whistleblower Partners attorneys also have represented whistleblower Dr. David Sewell, M.D., in DOJ’s $32.5M settlement with Freedom Health, Inc. which resolved allegations of RA fraud and whistleblower Kathleen Ormsby in DOJ’s $90M settlement with Sutter Health for alleged RA fraud.
With more than 54% of seniors insured by Medicare Advantage plans and $538 billion in MA spending last year, the message from DOJ, aided by whistleblowers, is clear. Medicare Advantage plans must ensure that their diagnosis data is accurate, supported, and truthful—and they must delete unsupported codes, not just add profitable ones.
