Aetna Pays $117.7M Over Inaccurate Medicare Codes
CVS Health's insurance arm, Aetna, will pay $117.7 million to settle federal allegations that it knowingly submitted inaccurate diagnosis codes to inflate its reimbursements from the Medicare Advantage program. The Department of Justice (DOJ) announced the settlement Wednesday, targeting what it called "inaccurate and untruthful" submissions from one of the largest private providers of Medicare plans for seniors.
The settlement resolves allegations spanning two periods. For the 2015 payment year, the DOJ claimed Aetna used chart reviews to find new billable diagnoses but ignored reviews that failed to substantiate codes it had already submitted. From 2018 through 2023, Aetna allegedly submitted or failed to correct erroneous codes for morbid obesity for patients whose body-mass index (BMI) was inconsistent with the diagnosis. While CVS Health, which acquired Aetna in late 2018, denied liability, a company spokesman stated the settlement allows it to "avoid the uncertainty and further expense of prolonged litigation."
DOJ Signals Crackdown on $500B Program
The settlement serves as a direct warning to the entire health insurance industry, which collects over $500 billion annually to administer Medicare Advantage plans. Federal officials have increased their scrutiny of how insurers use medical codes, which directly determine the level of government subsidy paid for each patient. Higher-risk diagnoses result in higher payments to the health plans.
The DOJ's action against Aetna underscores its intent to pursue insurers that overstate patient health risks for financial gain. The government made its position clear, vowing to protect the integrity of the federally funded program.
We will continue to hold accountable insurers that knowingly submit inaccurate or unsupported diagnoses to improperly inflate reimbursement.
— Brett A. Shumate, Assistant Attorney General.
Edgen Stock·Mar 11 2026, 22:10
