Medicare Advantage Fraud: Follow the Diagnosis, the Payment and the Decision Not to Correct It

Medicare Advantage fraud includes knowingly submitting unsupported diagnoses for higher payments, keeping identified overpayments and buying enrollments through kickbacks. For an insider, the revealing moment is often what happens after somebody finds the problem. The code stays. The audit stops. The money keeps coming.

Medicare Advantage risk adjustment fraud was at the center of the allegations resolved by Kaiser Permanente’s $556 million settlement. But the business reaches beyond coding. A broker can sell the enrollment, and a nursing facility can profit by moving the resident out of the plan. What did the organization represent, what did it learn, and what did it do next?

Medicare Advantage, also called Medicare Part C, pays private plans a monthly amount for each enrollee, adjusted by a risk score built from diagnoses and demographic information, so a diagnosis can change the price of coverage long after the visit is over. The organization creating the code and the organization collecting the payment can be different businesses, and both sit on the trail from diagnosis to revenue.

MedPAC’s July 2026 data book puts enrollment at 35.5 million in February 2026, 55% of the beneficiaries eligible for Medicare Advantage.

Why the Same Patient Can Be Worth More on Paper

Payment-relevant diagnoses put a price on what the chart says, giving the plan a reason to influence how physicians and coders describe the patient.

A study in Health Management Policy and Innovation compared Medicare Advantage and fee-for-service claims using the payment-based HCC model and a different diagnostic measure, adjusted diagnostic groups. The paper found:

Using the alternative measure brought Medicare Advantage risk scores down to approximately the fee-for-service level. The apparent difference in sickness depended on how it was measured, including whether the measure determined the check.

The Inspector General’s assessment study found an estimated $7.5 billion in payments for 2023 from diagnoses appearing only on health risk assessments or assessment-linked chart reviews, with no other service record supporting them in the prior year’s data. For 1.7 million enrollees, that raised a stark question: was the diagnosis inaccurate, or had someone identified a serious condition without the patient receiving needed care? The money went out either way.

What Are the Red Flags for Medicare Fraud?

Add-only review instructions, diagnoses unrelated to the visit, and audit findings followed by blocked corrections recur in Medicare Advantage cases. The strongest account connects a specific finding to a specific response. The diagnosis, the submission and the response to contrary evidence have to be read together.

A chart review checks the medical record for diagnoses a provider omitted or submitted in error. The revealing material includes the review instructions, the additions and deletion findings, the submitted data, and what management did after an auditor or clinician objected. An internal correction matters only if it reaches the information driving payment.

The Inspector General’s compliance guidance identifies failures to remove unsupported codes, unsupported home-assessment diagnoses, and physician prompts seeking conditions patients did not have. It expressly includes prompts generated by artificial intelligence. The same guidance identifies unsupported diagnoses used to increase payments to providers under risk-sharing arrangements. The delivery system changes. The question is still what the patient had and what the company submitted.

CMS’s payment audits test submitted diagnoses against medical records and require repayment of improper amounts. Plans must also return overpayments they identify themselves, and senior officers or their delegates sign off on payment data. What did the company know when it kept the money or signed?

Who Sees the Diagnosis and the Money?

Plans submit the data, provider groups create and share in the value of diagnoses, and vendors review charts or conduct assessments. Brokers and agents sit on the enrollment side. Each business leaves a different trail: the provider agreement, the vendor’s compensation formula, the coding instructions, the sales target or the invoice.

The public cases include whistleblowers who worked in coding, risk adjustment, finance, medicine and brokerage, as well as a part-owner of an assessment vendor. The internal record can explain why a diagnosis was generated, why a contradiction was discounted or why a correction stopped before reaching Medicare.

Medicare Advantage whistleblowers can receive 15% to 30% of what the government recovers in a qui tam case under the False Claims Act. What you saw in the review queue, the finance meeting or the enrollment system can be the connection the payment data never show.

The Fraud: Where the Records and the Money Part Company

Medicare Advantage fraud cases and settlements include a $95 million whistleblower share in the Kaiser resolution, according to the Justice Department’s announcement. The evidence behind these cases follows the work: how a code was created, how a finding was handled and what a payment bought.

One-Way Chart Reviews

One-way chart review fraud was one of the allegations resolved in the $270 million HealthCare Partners and DaVita settlement. The Department of Justice described reviews that found missed diagnoses and passed them to plans for higher payment, while ignoring inaccurate codes that should have been deleted. The same review found reasons to pay more and reasons to pay less. According to the allegations, only the first result counted.

Contingency-Fee Chart Review

Contingency-fee chart review paid DxID 20% of additional revenue generated for Group Health Cooperative, according to the government’s complaint. The government also alleged that DxID generated new diagnoses solely from problem lists, past medical history, lab and radiology tests, and equipment orders.

Home Assessments Without Clinical Support

Medicare Advantage home visit fraud allegations produced a $37 million settlement with Cigna, which made factual admissions about its assessment program. Cigna admitted that, in many instances, the forms lacked clinical information corroborating the diagnoses it reported. Visiting healthcare providers often could not provide treatment or prescriptions. A visit intended to capture a diagnosis had become a payment source without the clinical work the diagnosis called for.

Diagnoses Added After the Visit

Medicare Advantage addendum fraud can involve queries sent more than a year after the visit, as the Justice Department alleged against Kaiser. The government said physicians faced pressure to add conditions they had not considered or addressed at the encounter, with bonuses tied to diagnosis goals.

Risk-Score Targets Set by Finance

Medicare Advantage risk-score targets included an average score of 0.92 in the whistleblower’s complaint against Martin’s Point. The complaint alleged that finance set the target high enough to increase revenue but low enough to avoid a government audit. The target for measured sickness came from finance.

Higher-Paying Conditions the Chart Contradicts

HCC coding fraud in Medicare Advantage included Cigna’s alleged submission of morbid-obesity codes for beneficiaries whose recorded BMI was below 35. The national settlement announcement describes Cigna submitting or failing to delete those codes to obtain higher payments.

Past Disease Reported as Active

Medicare Advantage upcoding appears in three prostate-cancer patient examples in a whistleblower’s complaint against Sutter Health. The complaint alleged that active-cancer codes reached Medicare after the patients’ prostates had been removed, without treatment directed to cancer. A separate complaint against Martin’s Point alleged active prostate-cancer coding after surgery despite no evidence of recurrence.

Correcting the Wrong File

Medicare Advantage billing corrections became the issue after a Sutter audit team found 383 errors in a partial review, according to its whistleblower’s complaint. The complaint alleged that management ordered corrections only on the billing side of the electronic record. The whistleblower explained that the medical record still supplied the data used for Medicare Advantage payment. The audit could show a correction while the payment input stayed wrong.

Compliance Findings Overruled

Ignored risk adjustment compliance findings included a review that, according to Martin’s Point’s whistleblower, found that patients did not have, or charts did not support, 60% of the illnesses reported to Medicare. The whistleblower alleged that the company neither expanded the review nor searched earlier periods. At Sutter, the complaint alleged that the audit was stopped.

Kickbacks Behind the Marketing Invoice

Medicare Advantage kickbacks and broker steering allegedly hid behind a $15 million annual website payment that an eHealth executive said produced just 15 enrollments. In its complaint, the government quoted an executive explaining that Humana was paying for the minisite and nothing more, while the commitments on enrollments were made by phone and on spreadsheets.

The alleged sales bargain lived in the spreadsheet while the contract sold a website.

Enrollment Referral Kickbacks

Medicare Advantage enrollment referral kickbacks included payments of typically $200 per beneficiary referred or recommended at Oak Street Health, the Department of Justice alleged. The alleged purchase was the recommendation itself.

Steering Disabled Beneficiaries Away

Medicare Advantage risk selection included an alleged condition that disabled beneficiaries make up no more than 27% of enrollments for Aetna to make a payment to eHealth. The government’s complaint described separate steps in the agents’ quoting tool: disabling an enrollment button, then filtering out Aetna plans by age. The incentive narrowed the choices agents could offer callers.

Enrollment Without Consent

Medicare Advantage enrollment without consent included one caller’s account in the government’s eHealth filing: in June 2019, a beneficiary complained that she had sought free information, said she wanted to keep her existing coverage, and later discovered the agent had enrolled her in another plan. The government’s account says the agent had promised her insurance would not change.

Nursing Home Disenrollment

Nursing home Medicare Advantage disenrollment fraud led to a $7.85 million settlement with Plaza Rehab and Citadel Consulting. They admitted that staff often moved residents out of Medicare Advantage without consent. Citadel set a monthly disenrollment quota, and the facility earned more from Original Medicare.

Your View Inside the Business Matters

If you know why the unsupported code survived, why the audit stopped or what the broker’s invoice really bought, speak with our whistleblower experts. We connect the clinical evidence, the payment trail and the decisions inside the business, bring in Medicare Advantage whistleblower lawyers with the specific experience your case needs, and stay beside you through the case.