Federal audits by the HHS Office of Inspector General found that Humana and UnitedHealthcare overbilled Medicare by nearly $180 million in 2020 and 2021 through unsupported diagnosis codes. HumanaChoice and UnitedHealthcare of Wisconsin allegedly upcoded conditions like strokes and cancers to inflate reimbursements. Both insurers strongly dispute the audit methodology and refuse to return the funds, while the government continues efforts to curb risk-adjustment gaming.
Federal Medicare Advantage audits
- ▪The U.S. Department of Health and Human Services Office of Inspector General audits focused on 11 groups of high-risk diagnosis codes, including acute stroke, heart attack, embolism, sepsis, and several types of cancers.
- ▪The U.S. Department of Health and Human Services Office of Inspector General conducted compliance audits of Medicare Advantage plans operated by Humana and UnitedHealthcare for the 2020 and 2021 payment years.
Upcoding overpayment findings
- ▪The improper coding identified in the audits involved recording more severe versions of actual medical conditions or including codes for diseases from which members had already recovered.
- ▪HumanaChoice received an estimated $130.9 million in Medicare overpayments for 2020 and 2021 after 178 of 220 sampled enrollee-years lacked supporting medical records.
- ▪The U.S. Department of Health and Human Services Office of Inspector General audits estimated that HumanaChoice and UnitedHealthcare of Wisconsin jointly overcharged the federal government by approximately $180 million in 2020 and 2021.
Insurer disputes audit methodology
- ▪Humana and UnitedHealthcare both disagreed with the audit findings, stating that the methodology was flawed and skewed toward finding overpayments.
- ▪Humana and UnitedHealthcare stated they have no plans to return the estimated overpayments or perform additional reviews of their coding practices.
- ▪A Humana spokesperson stated that the Office of Inspector General's findings and recommendations do not represent final determinations.
Risk adjustment payment incentives
- ▪The risk-adjusted payment system incentivizes Medicare Advantage insurers to exaggerate member health needs to receive higher reimbursements, a practice known as upcoding.
- ▪The federal government pays Medicare Advantage insurers a per-member, per-month fee adjusted based on the expected medical needs and costs of each enrollee.
- ▪The Centers for Medicare & Medicaid Services finalized a policy in April 2026 to stop Medicare Advantage plans from receiving payments for diagnoses not tied to actual medical encounters.
Previous MA coding investigations
- ▪Audits by the HHS Office of Inspector General in 2026 found that Blue Cross and Blue Shield of Alabama, Gateway Health Plan, and Priority Health received millions in overpayments in 2018 and 2019.
- ▪A Senate investigation in 2026 found that UnitedHealthcare employed coders and incentivized external providers to aggressively capture diagnoses and maximize risk scores.
Debatable claims
- ▪The Medicare Advantage risk-adjusted payment system should be reformed to prevent upcoding
- ▪The HHS Office of Inspector General's audit methodology for Medicare Advantage is flawed
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