Philadelphia-based insurer Independence Blue Cross (IBX) has agreed to a $22.5 million settlement to resolve allegations that it failed to withdraw inaccurate diagnosis codes for Medicare Advantage Plan enrollees and obtained higher payouts.

The settlement resolves allegations from 2017 to 2021 that the company submitted “inaccurate and untruthful” diagnoses data to the U.S. Centers for Medicare and Medicaid Services (CMS) that inflated risk adjustment, according to a Sept. 30 Department of Justice (DOJ) press release.

Moreover, IBX knowingly failed to withdraw the diagnoses data or reimburse CMS and falsely certified to the agency data was accurate in writing, the government had alleged.

“The government pays private insurers over $530 billion each year to care for Americans enrolled in Medicare Advantage,” Assistant Attorney General of the Justice Department’s Civil Division Brett Shumate said in a statement. “When insurers knowingly and improperly retain inflated payments based on inaccurate and untruthful diagnoses, we will hold them accountable whether they are a small regional plan or a large nationwide organization.”

The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claim Act. A former IBX employee will receive a $3.8 million share of the settlement amount, DOJ said.

Reducing healthcare fraud, especially in Medicaid and Medicare, has been a priority for federal officials. In late August, CMS announced it has prevented more than $1.6 billion in fraudulent Medicare lab payments since the start of the second Trump administration.

S. Health and Human Services (HHS) Secretary Robert F. Kennedy Jr.

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