Medicare Advantage plans and the providers who supply their risk-adjustment data are facing the largest False Claims Act settlements in the program's history. In January 2026, Kaiser Permanente affiliates agreed to pay $556 million over allegations of inflated diagnosis coding; two months later, Aetna paid $117.7 million over inaccurate risk-adjustment diagnoses. Both rest on the same theory: a health plan can be liable not only for codes it submits, but for codes it should have caught and did not correct. For a compliance officer, that exposure now reaches coding programs, chart-review vendors, and provider groups.
Risk Adjustment as a False Claims Act Theory
Medicare pays a Medicare Advantage plan more for a patient whose diagnosis codes map to a higher-risk Hierarchical Condition Category, and CMS requires the plan to certify that the codes it submits are accurate. A plan that knowingly submits, or knowingly fails to withdraw, an unsupported diagnosis can face liability under the False Claims Act, whether the Department of Justice intervenes directly or a whistleblower files first under the qui tam provisions. The Kaiser Permanente settlement alleged the health system pressured physicians to add diagnoses the physician never actually addressed during the visit. The Aetna settlement turned on obesity codes inconsistent with the patient's recorded body mass index, and on inaccurate codes the plan found during a 2015 chart review and never withdrew, the same correction duty behind the 60-day overpayment rule.
The One-Way Chart Review Theory
A retrospective chart review that looks in only one direction carries its own liability theory. In the Ninth Circuit's 2016 decision in Swoben v. United Healthcare, the relator alleged that Medicare Advantage plans scanned patient charts for diagnoses that would increase payment while ignoring erroneous codes that would decrease it, the same structure used in a provider group's chart-mining arrangement with the plan. The court held that structuring a review to avoid finding overpayment errors can support liability, because CMS regulations already obligate a plan to exercise due diligence over the codes it submits. The theory is not automatic proof of fraud: a 2025 special master's report in a Medicare Advantage case against UnitedHealth Group found the government could not point to a single record that failed to support a submitted code. Compliance officers responding to a relator-initiated matter can review our companion piece on how a qui tam lawsuit unfolds.
A managed care plan's False Claims Act exposure does not stop at the diagnosis codes it submits. It extends to every chart-review vendor and provider group whose records shaped those codes.
RADV Audits and the Extrapolation Fight
CMS's own audit program adds a second front. The 2023 RADV final rule authorized CMS to extrapolate the error rate found in an audit sample of a Medicare Advantage contract across the plan's entire enrolled population, for payment years back to 2018, with the agency estimating eventual recoveries near $4.7 billion. A federal court later vacated key portions of the rule on procedural grounds and remanded it to the agency. How RADV recoveries get calculated is unresolved, but the audit authority is not going away, and a RADV finding routinely becomes the evidentiary predecessor to a False Claims Act referral once the sampled errors look like a pattern.
Downstream Provider and Vendor Exposure
A plan's certification duty extends to every chart-review vendor and provider group that generated the underlying diagnosis. A provider group that shares in the risk-adjustment revenue its coding produces, the kind of arrangement behind the chart-mining relationship in Swoben, faces the same exposure as the plan once it knew, or should have known, a code was unsupported. A settlement at this scale rarely ends with the check. Many come with a corporate integrity agreement imposing years of OIG-monitored coding audits, and an individual coder or executive who certified inaccurate data recklessly can face OIG exclusion from every federal healthcare program.
Why Early Legal Counsel Is Critical
It is critical that health plans, provider groups, and compliance officers promptly retain experienced healthcare defense counsel upon receiving a civil investigative demand, a RADV audit notice, or any other government inquiry into risk-adjustment coding. Early legal intervention can protect the organization's rights, shape the accuracy review before it becomes an admission, preserve defenses under the one-way chart review theory, and let counsel communicate with investigators on the organization's behalf. For what happens next, see our defense timeline for an FCA investigation.
How Health Law Alliance Can Help
Health Law Alliance defends managed care plans, provider groups, and compliance officers against False Claims Act exposure arising from risk-adjustment coding, RADV audits, and qui tam litigation. Our bench includes a former federal prosecutor with direct experience evaluating the coding patterns the government now scrutinizes. If your organization faces a risk-adjustment inquiry or a chart-review liability question, contact our False Claims Act defense team for a free, confidential consultation.
