By Catherine Dunn
The Department of Justice announced a $117.7 million settlement Wednesday with CVS Health's insurance arm Aetna over allegations that the company submitted "inaccurate and untruthful" diagnosis codes to inflate its payments from the federal Medicare program.
Aetna is among the largest providers of privately run Medicare Advantage plans for seniors, which are subsidized by the government. How insurers apply medical codes to those patients -- which can generate higher payments to the health plans -- have increasingly come under scrutiny from federal officials.
The settlement covers two time periods, first in payment year 2015, when the DOJ says Aetna paid diagnosis coders to review patient medical charts. Through these chart reviews, the DOJ alleges, Aetna identified opportunities for additional payments from the Medicare agency, yet ignored the results when the chart reviews didn't substantiate codes Aetna had already submitted to the agency.
Between 2018 and 2023, the DOJ says, Aetna submitted or failed to withdraw erroneous codes for morbid obesity, applied to plan members whose body-mass index, or BMI, "was inconsistent" with such a diagnosis.
CVS Health acquired Aetna in late 2018. "Aetna continues to disagree with the DOJ's industrywide allegations, and this settlement should not be seen as an acknowledgment of liability," a company spokesman said. Aetna is now "able to avoid the uncertainty and further expense of prolonged litigation," he added.
Assistant Attorney General Brett A. Shumate, with the DOJ's civil division, noted that insurance companies collect over $500 billion annually from the government to run Medicare Advantage plans. "We will continue to hold accountable insurers that knowingly submit inaccurate or unsupported diagnoses to improperly inflate reimbursement," Shumate said in a statement.
Write to Catherine Dunn at catherine.dunn@dowjones.com
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(END) Dow Jones Newswires
March 11, 2026 16:09 ET (20:09 GMT)
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