CVS Health Corp.-owned Aetna agreed to pay $117.7 million to resolve allegations the company violated the False Claims Act, according to the Dept. of Justice (DOJ). The case related to Aetna submitting or failing to withdraw inaccurate diagnosis codes to increase its Medicare Advantage (MA) payments. Aetna did not admit wrongdoing, and the DOJ said that “there has been no determination of liability.”

"Aetna continues to disagree with the DOJ’s industry-wide allegations, and this settlement should not be seen as an acknowledgment of liability,” Aetna spokesperson Phillip Blando said in a statement. “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 DOJ alleges that Aetna’s chart reviews for payment year 2015 did not substantiate some diagnosis codes that the insurer had reported to CMS. The insurer also did not delete or withdraw those diagnosis codes, which would have required Aetna to reimburse the government for overpayments, according to the DOJ complaint.

The settlement also resolves allegations that Aetna knowingly submitted or failed to delete inaccurate diagnosis codes for morbid obesity for payment years 2018 to 2023. A former Aetna risk-adjustment coding auditor had brought a whistleblower lawsuit in the U.S. District Court for the Eastern District of Pennsylvania related to the obesity allegations. The ex-employee will receive $2 million for her work bringing the allegations to light, according to the DOJ.

Brett A. Shumate, the DOJ’s assistant attorney general, noted in a press release that the federal government pays MA insurers $530 billion per year and said that “we will continue to hold accountable insurers that knowingly submit inaccurate or unsupported diagnoses to improperly inflate reimbursement.”

Added David Metcalf, U.S. Attorney for the Eastern District of Pennsylvania: “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.”

While Aetna resolved these allegations, CVS disclosed other pending False Claims Act lawsuits. For instance, the U.S. Attorney’s office for the District of Massachusetts in May 2025 filed a complaint alleging Aetna and two other insurers “paid kickbacks to insurance brokers to induce them to direct patients to their Medicare Advantage plans,” CVS wrote in its 10-K. The complaint alleges CVS “engaged in discriminatory conduct,” as well. CVS said it “is defending itself against these claims.”

In addition, CVS noted in its annual report a complaint filed in February 2014 alleging Caremark “misrepresented true prices paid by [Caremark] to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered” by Caremark. A court later ruled that CVS was liable under the False Claims Act and entered a judgment of $291 million. CVS said it has appealed the decision to the Third Circuit Court of Appeals.

CVS also disclosed that the U.S. Attorney’s Office for the Southern District of New York in December 2019 filed a complaint alleging Omnicare, Inc., a long-term care pharmacy that CVS owned, improperly filed prescriptions at certain non-skilled nursing facilities, violating the False Claims Act.

A jury in April 2025 found CVS and Omnicare liable and awarded a fine of about $136 million, which was tripled to about $407 million. Three months later, the court awarded penalties against Omnicare for $542 million. CVS said it has filed an appeal to the Second Circuit Court of Appeals. In September 2025, Omnicare voluntarily filed for Chapter 11 bankruptcy.

By Tim Casey
AIS’s Directory of Health Plans
March 16, 2026