Aetna, the insurance arm of CVS Health, has agreed to a $117.7 million civil settlement with the U.S. government to resolve claims that it knowingly provided inaccurate diagnosis information for some Medicare Advantage enrollees.
The U.S. Department of Justice said the settlement settles allegations that Aetna violated the federal False Claims Act by submitting untruthful diagnosis codes to the Centers for Medicare & Medicaid Services. The allegations center on diagnostic entries for morbid obesity and other conditions in Medicare Advantage plan records.
Under Medicare Advantage - also known as Medicare Part C - beneficiaries who opt out of traditional Medicare enroll in private plans known as Medicare Advantage Organizations, or MAOs. CMS generally pays MAOs higher amounts for enrollees deemed sicker, using risk adjustments that rely on diagnosis codes submitted by plans.
According to the Justice Department, the period at issue runs from 2018 through 2023. The department said Aetna submitted diagnosis data for morbid obesity in patients whose reported Body Mass Index did not align with such a diagnosis. The government also alleged that Aetna did not remove inaccurate diagnosis codes that were identified during a review of medical records dating to 2015.
The settlement also resolves a whistleblower suit originally filed in January 2024 in federal court in Philadelphia by Mary Melette Thomas, described by the Justice Department as a former Aetna risk adjustment coding auditor and an Arizona resident. Under the settlement terms, Thomas will receive $2.01 million as her share of the recovery, consistent with provisions in the False Claims Act that permit relators to sue on the government's behalf and share in recoveries.
CVS, headquartered in Woonsocket, Rhode Island, said it agreed to the settlement to avoid the uncertainty and expense of litigation. The company stated that it continues to disagree with the Justice Department's industry-wide allegations and said the settlement should not be construed as an admission of liability. CVS acquired Aetna in 2018.
The Justice Department noted that private insurers receive more than $530 billion annually from the government to provide care for Medicare Advantage patients, citing the scale of federal payments to the MAO market.
In addition to the legal resolution, the original report included a description of a stock analysis product that evaluates CVS using automated metrics. That description said the product uses many financial measures and has identified past successful stock picks. The settlement announcement itself does not include operational or financial guidance from Aetna or CVS beyond the statement about avoiding litigation costs.