Medicare Advantage (Medicare Part C) remained a top enforcement priority in 2022, and Medicare Advantage Organizations (MAOs) are the subject of intense scrutiny by the Department of Justice (DOJ); the Office of Inspector General for the Department of Health and Human Services (HHS OIG); and the press. MAOs undoubtedly will continue to face considerable enforcement in 2023 and beyond, particularly as Medicare Advantage continues to grow in both number of enrollees and in federal spending. As of January 31, 2023, more than 30 million people are enrolled in MAOs—nearly half of all Medicare enrollees.

Reinforcing DOJ’s continued scrutiny of MAOs, Deputy Assistant Attorney General Michael Granston emphasized in remarks at ACI’s annual False Claims Act Conference on January 23, 2023 that Medicare Advantage remains one of DOJ’s top enforcement priorities. In fact, DOJ is investigating and litigating against many MAOs under the False Claims Act (FCA), and many of the nation’s largest MAOs remain embroiled with DOJ in active FCA lawsuits.

As background, and as we have previously discussed, the Centers for Medicare & Medicaid Services (CMS) pays MAOs a capitated payment for each plan member. CMS adjusts capitated payments to MAOs based on each member’s demographic information and health conditions, which are captured by diagnosis codes. Generally, MAOs receive higher payments for sicker members because the cost of care for these members is typically higher. CMS requires MAOs to...

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