DOJ Settles False Claims Act Suit Against Medicare Advantage Provider
On March 26, 2025, the U.S. Department of Justice (DOJ) announced that it settled a False Claims Act (FCA) action against a California-based healthcare provider and a separate radiology group for allegedly submitting and conspiring to submit false diagnosis codes to increase payments from the Medicare Advantage program.1 The recent settlement underscores DOJ’s continued commitment to combat healthcare fraud in the Medicare Advantage program, including by targeting diagnosis coding by healthcare providers.
Background
Medicare Advantage, also known as Medicare Part C, gives seniors the option to receive Medicare benefits by enrolling in private healthcare plans. The Centers for Medicare & Medicaid Services (CMS), which oversees the Medicare program, pays Medicare Advantage plans a fixed amount each month for each enrolled senior. CMS then adjusts that amount to account for the health status and demographic characteristics of a given plan’s enrolled population—a process known as “risk adjustment.” For enrollees with more severe health conditions based on the diagnosis codes reported by their providers, CMS pays the plan more to cover the higher expected costs of treatment. The plan, in turn, pays healthcare providers for the items and services they provide to its members out of the revenue it receives from CMS.
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