Known Medicare Advantage Overpayments: The 60-Day Rule and Unsupported Diagnoses Left in Place

The Medicare Advantage 60-day overpayment rule requires a plan to report and return an identified overpayment within 60 days, unless the Centers for Medicare & Medicaid Services directs otherwise for risk-adjustment audits. If your team found unsupported diagnoses and the plan kept the payments, what happened after the finding matters. The review, the response and the money retained can connect your work to a Medicare Advantage fraud case.

What Is the 60-Day Overpayment Rule for Medicare?

For Medicare Advantage organizations, the reporting-and-return rule starts the deadline when the organization identifies that it received an overpayment. The rule requires both reporting and returning it, including telling the agency the amount and reason.

For risk-adjustment data, an overpayment is money the plan was not entitled to after the annual final submission deadline announced by the Centers for Medicare & Medicaid Services. The look-back covers the six most recent completed payment years.

That makes the payment year part of the story. A review finding concerns particular diagnoses and encounters. The overpayment inquiry connects those findings to submitted data and the money paid for the affected year.

Under the Affordable Care Act’s overpayment provision, money retained after the reporting-and-return deadline becomes an obligation for False Claims Act purposes. A case can therefore concern money the company knowingly kept after learning it was overpaid. The decision after the review can matter as much as the original submission.

When Is a Medicare Advantage Overpayment Identified?

An overpayment is identified when the organization knowingly receives or retains it. That includes a company that knew it was overpaid, deliberately avoided finding out, or recklessly disregarded whether it had been overpaid. We examine what the company learned and how it responded, including decisions to leave adverse findings unresolved.

A reviewer may question a diagnosis, establish that the chart does not support it and send the finding to management. What management did next connects the finding to the money: did the submitted data change, and was the overpayment returned?

UnitedHealthcare challenged the overpayment rule, and the D.C. Circuit restored it in 2021. The court left out the old definition of identification, which reached what a plan should have discovered through reasonable diligence. The current rule uses the knowledge standard described above.

The court also distinguished broad risk-adjustment audits from the obligation to return known overpayments. The duty to return known overpayments stands on its own.

Medicare Advantage also has its own rule, separate from the 2016 rule for providers and suppliers under Parts A and B. An investigation period described for another part of Medicare does not establish the deadline for a Medicare Advantage plan. We work through the payment years and what the company knew with you and Medicare Advantage whistleblower lawyers.

Why an Unsupported Diagnosis Can Leave Money Behind

Medicare Advantage pays private plans monthly for coverage. The diagnoses used in risk adjustment help determine the payment by contributing to an enrollee’s risk score. A diagnosis that raises the score increases what the plan receives for covering the patient.

That connects the coding department to finance even when the review produces no new treatment. The Urban Institute’s 2024 presentation, Reimagining the Medicare Advantage Risk Adjustment Program, describes chart reviews and in-home assessments as practices plans use to maximize risk-adjustment payments. It makes a useful point about where that money can go:

The presentation explains the incentive to pursue diagnoses at the highest possible severity. The overpayment cases show the other side of that incentive: removing a diagnosis that inflated payment requires money to go back. The same review can produce a finding that raises revenue and another that reduces it.

One-way chart review uses the additions while leaving unsupported diagnoses already submitted in place. The overpayment question comes after that review: what did the organization know, which payment did the finding affect, and what happened to the money?

Deleting a Diagnosis and Returning an Overpayment

A correction inside the billing system can leave an unsupported diagnosis in the data used to pay the plan. The Centers for Medicare & Medicaid Services’ historical manual and risk-adjustment training instructed plans to delete unsupported or invalid submitted codes. The overpayment rule requires reporting and returning the money.

We follow the finding through the provider, the coding vendor and the plan to see where it stopped. The question is whether the correction reached the payment calculation and whether the overpayment was returned.

The Cases Show What Happened After the Finding

The recurring allegation is that organizations used a review’s favorable results and kept money tied to its unfavorable ones. Medicare paid for diagnoses the review could not support. An accuracy check became a way to find more revenue, with the corrections that would reduce it left behind.

HealthCare Partners Added Codes and Ignored Deletions

HealthCare Partners, a California independent physician association acquired by DaVita, allegedly searched medical records for diagnoses its providers had missed and sent those additions to Medicare Advantage plans. According to the Justice Department’s October 2018 settlement announcement, it simultaneously ignored inaccurate codes whose deletion would have reduced payment or required refunds.

DaVita agreed to a $270 million settlement covering those whistleblower allegations and separately disclosed practices. The alleged payment chain ran from the physician group supplying codes to the plans obtaining increased Medicare payments and sharing them with the provider business. The additions brought money into that relationship. The ignored deletions would have sent money back.

Sutter’s Awareness Reached Beyond the First Codes Found

Sutter Health’s August 2021 settlement was $90 million, smaller than DaVita’s but again involving an alleged failure to correct. The lawsuit alleged that Sutter submitted unsupported diagnosis codes and, after becoming aware of them, failed to take sufficient corrective action to identify and delete additional unsupported codes.

The alleged problem extended beyond the first codes brought to Sutter’s attention. For a healthcare compliance employee, that distinction is concrete: what did the finding tell the organization about the rest of the affected diagnoses, and what did management do with that information?

Cigna and Aetna Kept the Unfavorable Results Out

The Justice Department alleged that Cigna’s chart reviews failed to substantiate some diagnoses it had already submitted, but Cigna did not delete or withdraw those codes. Doing so would have required repayment. The September 2023 national settlement covered that conduct for payment years 2014 through 2019, alongside other allegations.

Aetna’s March 2026 settlement announcement describes the same alleged choice for payment year 2015. Aetna allegedly used chart reviews to submit additional diagnoses, while leaving previously submitted codes that the reviews did not support. Both accounts connect the missing deletions directly to money that would have gone back to CMS.

Independent Health Corrected One Year and Left Others

The government’s complaint against Independent Health and its chart-review vendor DxID alleged a failure that crossed payment cycles. The issue was chronic kidney disease coded from laboratory values alone. The complaint describes notice, withdrawal of earlier codes and continued use of the practice:

The government’s allegation was that notice changed the treatment of one year’s codes while later years remained untouched. A correction in one period can make the decision about the next period particularly revealing.

Anthem’s Missing Deletion Reached an Individual Payment

The government’s complaint against Anthem traces an unsupported diagnosis through a review and into a particular payment year. It alleged that Anthem submitted an active lung-cancer code for a beneficiary’s June 2014 visit, to be used for payment in 2015. The complaint alleged that Anthem’s chart review did not substantiate that diagnosis. The complaint also said no other provider reported the condition, or another diagnosis in the same risk-adjustment category, during that service year.

According to the government’s complaint, Anthem neither submitted a deletion nor told CMS to stop relying on the code. The complaint said Anthem used the review to add three other diagnosis codes for the same visit. CMS then used the lung-cancer category in calculating the beneficiary’s payment, producing an alleged overpayment.

That example makes the missing correction specific. The government’s account connects the diagnosis, the visit, the review result, the absence of other support and the category CMS used to pay. An insider who understands the review output can help explain why the unsupported diagnosis survived into that payment calculation. The company’s response is visible in the data it sent and the correction it left out.

What the Review Result Leaves for an Insider to Explain

An insider can connect the clinical finding to the company’s response and the retained payment. The useful chronology runs from the encounter and submitted diagnosis to the review, the escalation, any correction and the return decision. Each part answers a different question about what the organization knew and did.

A coder may know why a diagnosis failed review. A compliance employee may know who received the findings. Someone in finance may know how correcting them would affect revenue. We connect those accounts with the review output, the submitted data and the payment year, so the case explains the decision that left the money in place.

The annual certification adds another comparison. The plan’s chief executive, chief financial officer or direct delegate must certify the accuracy, completeness and truthfulness of the submitted data. Findings inside the business can be read beside what the organization certified to CMS.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For the person who saw the findings reach management, the company’s response may be the part of the case only someone inside can explain.

When the Findings Reached Management

If you know which unsupported diagnoses reached management and why the money stayed, speak with our whistleblower experts about the decision after the audit. We build the connection between what the company learned and what it kept, bringing in Medicare Advantage whistleblower lawyers who understand risk-adjustment repayments. We stay beside you as partners throughout the case.