Medicare Advantage plans that contract with telehealth vendors to conduct in-home or virtual health risk assessments are drawing sustained scrutiny from the Department of Justice and the HHS Office of Inspector General. The assessments feed the diagnosis codes that determine a plan's risk-adjusted payment from CMS, and when the diagnoses recorded during a telehealth visit are not clinically supported or never lead to actual treatment, the plan's payment is inflated. That exposure does not stop at the plan. A treating or reviewing provider who signs off on unsupported diagnoses, or a telehealth vendor whose network of providers does so at scale, can face independent False Claims Act liability for causing the submission of false data to a federal health care program.
How Health Risk Assessments Feed Risk Adjustment
CMS pays Medicare Advantage plans a fixed monthly amount per enrollee, adjusted upward for enrollees with more numerous or more severe diagnoses under the CMS Hierarchical Condition Category model. A diagnosis code submitted through an encounter, including a telehealth health risk assessment, can map to an HCC and raise that enrollee's risk score, and the plan's payment, for the coverage year. The assessment itself is typically brief: an intake of medical history, a medication review, and a limited set of screening questions, conducted by a nurse practitioner or other provider working for a vendor the plan has contracted with rather than the enrollee's own treating physician.
The Enforcement Pattern DOJ and OIG Have Documented
This is a documented civil enforcement area, not a theoretical one. In October 2024, OIG reported that diagnoses appearing only on a health risk assessment or an assessment-linked chart review, with no other record that the enrollee was ever treated for the condition, accounted for an estimated $7.5 billion in Medicare Advantage risk-adjusted payments for 2023, with in-home assessments and linked chart reviews generating close to two-thirds of that figure. On June 3, 2026, the Department of Justice announced a $56.5 million False Claims Act settlement with Community Care Health Network (Matrix Medical Network), HealthFair, and HealthFair's founder, resolving allegations that in-home assessments generated diagnoses, including diabetic retinopathy, atrial fibrillation, HIV/AIDS, and metastatic cancer, that fell short of clinical support documented elsewhere in the enrollee's record. The settlement was civil, resolved two separate whistleblower suits, and included a five-year corporate integrity agreement for Matrix. No criminal charges were brought in that matter.
A diagnosis recorded on a health risk assessment and never treated anywhere else in the enrollee's record is the fact pattern DOJ and OIG have both targeted, in the home and over telehealth alike.
Where Provider-Level Exposure Arises
The Matrix and HealthFair matters targeted the vendors and a founder, not a plan, which is the exposure pattern telehealth providers should read closely. A treating or reviewing provider who signs a chart containing a diagnosis unsupported by the underlying clinical findings can be treated as having caused a false claim, separate from any liability the contracting Medicare Advantage plan carries. A telehealth vendor whose provider network records the same unsupported diagnosis pattern across many assessments faces the added exposure of a recoupment demand once a payer or contractor identifies the pattern, and potential referral for a program integrity audit, including one conducted by a UPIC on CMS's behalf. Compensation arrangements that pay a provider or vendor based on the volume of diagnoses captured raise a separate anti-kickback statute question that a defense review should evaluate alongside the risk-adjustment exposure.
Why Early Legal Counsel Is Critical
It is critical that healthcare providers promptly retain experienced healthcare defense counsel upon receiving a subpoena, civil investigative demand, audit notice, investigative request, or other government inquiry tied to health risk assessment or risk-adjustment data. Early legal intervention can protect the provider's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to unnecessary risk.
How Health Law Alliance Can Help
Health Law Alliance has represented 2,500+ clients across healthcare regulatory and fraud defense matters over 25+ years, including telehealth companies and providers facing Medicare Advantage risk-adjustment exposure. Our telehealth law and telemedicine attorneys review health risk assessment arrangements, respond to CMS and DOJ inquiries, and defend providers and vendors once a civil investigative demand or audit has arrived. Contact Health Law Alliance for a free, confidential consultation.
