CVS Health’s Aetna to Pay $117.7 Million to Resolve US Medicare Fraud Claims

Aetna Inc., a national insurer owned by CVS Health, has agreed to pay $117.7 million to settle a case alleging that it had violated the False Claims Act, swindling Medicare out of millions of dollars by submitting inflated or inaccurate diagnosis codes for its Medicare Advantage Plan recipients.

According to a March 11 statement from the Department of Justice (DOJ), the Hartford, Connecticut-based insurer had been accused of inflating patient-diagnosis data to the Centers for Medicare & Medicaid Services (CMS) to receive higher payments. Aetna was also accused of falsely certifying to the CMS that the data were accurate.

The proposed settlement represents a resolution to these allegations. Under the current Medicare Program, referred to as Medicare Part C, patients have the choice of opting out of traditional Medicare and instead enrolling in private health care plans offered by many insurance firms. These are known as Medicare Advantage Organizations (MAOs)

Typically, the CMS pays the MAOs a fixed monthly amount that is adjusted for various risk factors for health care expenses. The CMS tends to pay MAOs more for those patients needing additional care. In the process, the CMS collects medical diagnosis codes from the MAOs to review the illnesses and treatments.

“The government pays private insurers over $530 billion each year to care for Americans enrolled in Medicare Advantage,” Assistant Attorney General Brett A. Shumate said in the statement.

“We will continue to hold accountable insurers that knowingly submit inaccurate or unsupported diagnoses to improperly inflate reimbursement.”

U.S. Attorney David Metcalf for the Eastern District of Pennsylvania said the government depends on and pays MAOs to provide vital health care to seniors and other vulnerable Americans.

“When corporations or individuals threaten the Medicare Advantage program by diverting those limited government resources through fraud, waste, or abuse, we will continue to pursue all available remedies against them,” he said in the statement.

Aetna was incorporated under the laws of Pennsylvania.

“Today’s settlement makes clear that no company is beyond accountability, no matter how large or well known,” Scott J. Lampert, U.S. Department of Health and Human Services deputy inspector general for investigations, said in the report.

The DOJ’s allegations against Aetna date back to 2015, when it claimed that the insurer failed to substantiate some diagnosis codes previously reported to the CMS. From 2018 to 2023, the DOJ accused Aetna of knowingly submitting false diagnosis codes for morbid obesity to increase the payments it received from the CMS. The allegations state that the insurer submitted body mass index (BMI) records that were inconsistent with morbid obesity.

The DOJ noted that the resolution of these claims through the settlement remains as allegations only, with no determination of liability.

In a statement to The Epoch Times, CVS Health said Aetna continues to disagree with the DOJ’s “industry-wide allegations” and that the settlement does not constitute an acknowledgment of liability.

“Instead, we are now able to avoid the uncertainty and further expense of prolonged litigation, as we maintain our focus on delivering first-in-class member experience across our Medicare Advantage plans,” the statement read.