Policy & oversight
Florida Health System Settles Medicare Advantage Coding Fraud Allegations for 541.5 Million Dollars
The Department of Justice announced that The Villages Health System agreed to pay 541.5 million dollars to resolve federal allegations that it submitted unsupported diagnosis codes to Medicare Advantage plans for four consecutive years. Two insurers connected to the same conduct are also returning overpayments.
By the Goodsurance editorial teamAugust 31, 2026
The Department of Justice announced on August 26 that The Villages Health System LLC, a physician group serving the large retirement community of The Villages, Florida, agreed to pay 541.5 million dollars to settle False Claims Act allegations related to Medicare Advantage risk-adjustment coding.
Under Medicare Advantage, the federal government pays private insurers higher monthly amounts for enrollees who carry diagnoses linked to more intensive care needs. Accurate, documented coding is required to support those payments. Federal investigators alleged that between 2020 and 2024, The Villages Health used two internal practices, called "Retrospective Amendments" and "Sprints," to insert diagnosis codes into patient records after the fact, sometimes years after the relevant visit, without proper authorization from the rendering physician.
The Villages Health System agreed to pay 541.5 million dollars to settle Medicare Advantage coding fraud allegations, with two major insurers also returning related overpayments.
The provider group self-disclosed the conduct to the Department of Health and Human Services Office of Inspector General in December 2024, shortly before filing for Chapter 11 bankruptcy protection in July 2025. A federal bankruptcy court approved the settlement on August 25, 2026.
As part of the broader resolution, UnitedHealthcare and GuideWell Mutual Holding Corporation, the parent of Florida Blue, reached separate agreements with the Justice Department and CMS to return overpayments tied to the same diagnosis codes. Florida Blue agreed to return approximately 21 million dollars in total.
The Justice Department said the settlement reflects continued enforcement focus on diagnosis-code fraud in the Medicare Advantage program.
In plain words
A Florida doctor group called The Villages Health added diagnosis codes to patient records. Those codes were not backed up by what doctors actually found. The group did this from 2020 to 2024. The extra codes made Medicare Advantage insurance companies get more money from Medicare than they should have. The federal government called this fraud. The group agreed to pay 541.5 million dollars to settle the case. Two insurance companies, UnitedHealthcare and Florida Blue, also agreed to give back money they received because of those false codes. The Villages Health had already filed for bankruptcy before a court approved this settlement.
Understand the basics first
Source: U.S. Department of Justice
Read at the source →