Medicare Advantage Firm Settles $342M with Government Amid Ongoing Billing Investigation
June 26, 2026
KFF Health News: Medicare Advantage Company Pays $342M to Government in Midst of Billing Probe
A significant development has emerged in the Medicare Advantage sector, as Elevance Health, a major player covering approximately 2 million Medicare beneficiaries, has paid over $342 million to the government. This payment aims to settle allegations of overcharging the federal healthcare program for several years.
The transaction, which took place on May 27, was made via wire transfer to the Centers for Medicare & Medicaid Services (CMS). This information was revealed in a court filing dated June 22. Elevance referred to the payment as a “remittance of the total overpayment amount” as estimated by government audits. Company spokesperson Leslie Porras expressed optimism in a statement, indicating that Elevance is engaged in “constructive dialogue” with CMS and values their longstanding relationship.
This payment follows a CMS enforcement action in February, where the agency threatened to halt enrollments in Elevance’s Medicare Advantage plans unless the company addressed what CMS termed “substantial and persistent noncompliance” with federal regulations. These regulations mandate that health plans submit accurate billing data and return any identified overpayments.
Notably, this appears to be the first instance where CMS has successfully compelled a Medicare Advantage plan to repay tens of millions of dollars in alleged overpayments. Historically, agency officials have been aware that many health plans have overbilled the program, as highlighted by various audits.
David Lipschutz, an attorney with the Center for Medicare Advocacy, remarked, “I’ve never heard of something like this before,” noting that plans typically delay repayments for years. David Meyers, an associate professor at Brown University, described the payment as “substantial” and a positive step toward holding the industry accountable, calling it a significant win for CMS.
Currently, more than 35 million Americans, representing about 55% of Medicare beneficiaries, are enrolled in private Advantage health insurance plans. These plans offer additional benefits, such as hearing aids and dental coverage, which traditional Medicare does not provide. For many patients, joining these plans can be more cost-effective than purchasing supplemental insurance to cover gaps in traditional Medicare.
However, the value of Medicare Advantage for taxpayers remains a contentious issue. The plans have faced numerous whistleblower lawsuits and government investigations, alleging that they often exaggerate patient illnesses to improperly inflate their payments—claims that the industry disputes. Medicare compensates health plans at higher rates for sicker patients, but requires that only documented conditions in a patient’s medical records be billed.
Research indicates that Medicare overpays health plans by billions annually due to medical coding errors that result in inflated bills. Whistleblower lawsuits, primarily filed by former healthcare employees, have been the main avenue for recovering alleged overpayments. For instance, Kaiser Permanente recently agreed to pay $556 million to settle allegations of billing the government for non-existent medical conditions, marking the largest penalty to date.
In contrast, CMS has struggled to effectively prevent overcharging by Medicare Advantage plans. In 2014, the agency abandoned a proposed regulation aimed at curbing overbilling due to industry pushback. Even when audits revealed significant overpayments, CMS collected only a small fraction of the owed amounts.
The recent threat to bar Elevance from enrolling new members may signal a new approach. Matthew Fiedler, a health policy researcher at the Brookings Institution, noted that while the payment is not trivial, it represents a small portion of Elevance’s Medicare revenue. He emphasized that addressing the overpayment issue would require similar payments from all Medicare Advantage insurers.
Richard Kronick, a former federal health policy official, acknowledged that while the payment is a small fraction of Elevance’s revenue, it is still a considerable amount. He suggested that this action may indicate a stronger enforcement stance from CMS.
CMS has not yet commented on whether this payment will resolve the threat to Elevance’s enrollment capabilities. If it does, it may prove to be a relatively inexpensive resolution for the company, which estimated its “potential exposure” in this case at approximately $935 million in an April filing with the Securities and Exchange Commission.
Elevance has been in conflict with the federal government over its billing practices since 2020, when the Justice Department filed a False Claims Act lawsuit against the company, then known as Anthem. This case is still pending.
In court filings, Elevance confirmed the wire transfer amount of $342,209,085.30 and stated that the payment was related to the threatened enrollment ban. The company is also challenging the CMS enforcement action, labeling it “unprecedented.” Elevance has denied any wrongdoing in its defense against the Justice Department suit, arguing that CMS has been aware of its billing practices for years without taking action.
Meyers, the Brown University professor, suggested that CMS’s success in collecting this payment could pave the way for increased enforcement in the future. “It remains to be seen whether this is a sea change,” he concluded.
By Fred Schulte
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
June 26, 2026
KFF Health News: Medicare Advantage Company Pays $342M to Government in Midst of Billing Probe
A significant development has emerged in the Medicare Advantage sector, as Elevance Health, a major player covering approximately 2 million Medicare beneficiaries, has paid over $342 million to the government. This payment aims to settle allegations of overcharging the federal healthcare program for several years.
The transaction, which took place on May 27, was made via wire transfer to the Centers for Medicare & Medicaid Services (CMS). This information was revealed in a court filing dated June 22. Elevance referred to the payment as a “remittance of the total overpayment amount” as estimated by government audits. Company spokesperson Leslie Porras expressed optimism in a statement, indicating that Elevance is engaged in “constructive dialogue” with CMS and values their longstanding relationship.
This payment follows a CMS enforcement action in February, where the agency threatened to halt enrollments in Elevance’s Medicare Advantage plans unless the company addressed what CMS termed “substantial and persistent noncompliance” with federal regulations. These regulations mandate that health plans submit accurate billing data and return any identified overpayments.
Notably, this appears to be the first instance where CMS has successfully compelled a Medicare Advantage plan to repay tens of millions of dollars in alleged overpayments. Historically, agency officials have been aware that many health plans have overbilled the program, as highlighted by various audits.
David Lipschutz, an attorney with the Center for Medicare Advocacy, remarked, “I’ve never heard of something like this before,” noting that plans typically delay repayments for years. David Meyers, an associate professor at Brown University, described the payment as “substantial” and a positive step toward holding the industry accountable, calling it a significant win for CMS.
Currently, more than 35 million Americans, representing about 55% of Medicare beneficiaries, are enrolled in private Advantage health insurance plans. These plans offer additional benefits, such as hearing aids and dental coverage, which traditional Medicare does not provide. For many patients, joining these plans can be more cost-effective than purchasing supplemental insurance to cover gaps in traditional Medicare.
However, the value of Medicare Advantage for taxpayers remains a contentious issue. The plans have faced numerous whistleblower lawsuits and government investigations, alleging that they often exaggerate patient illnesses to improperly inflate their payments—claims that the industry disputes. Medicare compensates health plans at higher rates for sicker patients, but requires that only documented conditions in a patient’s medical records be billed.
Research indicates that Medicare overpays health plans by billions annually due to medical coding errors that result in inflated bills. Whistleblower lawsuits, primarily filed by former healthcare employees, have been the main avenue for recovering alleged overpayments. For instance, Kaiser Permanente recently agreed to pay $556 million to settle allegations of billing the government for non-existent medical conditions, marking the largest penalty to date.
In contrast, CMS has struggled to effectively prevent overcharging by Medicare Advantage plans. In 2014, the agency abandoned a proposed regulation aimed at curbing overbilling due to industry pushback. Even when audits revealed significant overpayments, CMS collected only a small fraction of the owed amounts.
The recent threat to bar Elevance from enrolling new members may signal a new approach. Matthew Fiedler, a health policy researcher at the Brookings Institution, noted that while the payment is not trivial, it represents a small portion of Elevance’s Medicare revenue. He emphasized that addressing the overpayment issue would require similar payments from all Medicare Advantage insurers.
Richard Kronick, a former federal health policy official, acknowledged that while the payment is a small fraction of Elevance’s revenue, it is still a considerable amount. He suggested that this action may indicate a stronger enforcement stance from CMS.
CMS has not yet commented on whether this payment will resolve the threat to Elevance’s enrollment capabilities. If it does, it may prove to be a relatively inexpensive resolution for the company, which estimated its “potential exposure” in this case at approximately $935 million in an April filing with the Securities and Exchange Commission.
Elevance has been in conflict with the federal government over its billing practices since 2020, when the Justice Department filed a False Claims Act lawsuit against the company, then known as Anthem. This case is still pending.
In court filings, Elevance confirmed the wire transfer amount of $342,209,085.30 and stated that the payment was related to the threatened enrollment ban. The company is also challenging the CMS enforcement action, labeling it “unprecedented.” Elevance has denied any wrongdoing in its defense against the Justice Department suit, arguing that CMS has been aware of its billing practices for years without taking action.
Meyers, the Brown University professor, suggested that CMS’s success in collecting this payment could pave the way for increased enforcement in the future. “It remains to be seen whether this is a sea change,” he concluded.
By Fred Schulte
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
