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Independence Blue Cross Will Pay 22.5 Million Dollars to Settle Claims It Kept Inaccurate Medicare Advantage Diagnosis Codes
Federal prosecutors say the Philadelphia insurer used chart reviews to find additional billing opportunities but ignored those same results when they showed the company had been overpaid.
By the Goodsurance editorial teamSeptember 30, 2026
The Justice Department announced on September 30, 2026 that Independence Blue Cross (IBX), a Philadelphia-based health insurer, agreed to pay 22.5 million dollars to resolve allegations that it violated the False Claims Act. The complaint covers Medicare Advantage payment years 2017 through 2021.
According to federal prosecutors, IBX operated a chart review program in which nurse reviewers examined patient medical records. When those reviews identified additional diagnosis codes that could generate more payments from CMS, IBX submitted the extra codes. When the same reviews found that previously reported diagnoses were not supported by the records, IBX did not delete or correct those codes, a step that would have required reimbursing Medicare.
A major Pennsylvania Medicare Advantage insurer will pay 22.5 million dollars to settle federal claims it kept inaccurate diagnosis codes to avoid repaying Medicare.
The government contends IBX also falsely certified to CMS in writing that its diagnosis data was accurate and truthful. Because Medicare Advantage payments are calculated in part based on enrollees' documented health status, unsupported diagnosis codes can inflate the monthly amounts the government pays to the plan.
A former IBX employee filed the case under the whistleblower provisions of the False Claims Act. That individual will receive approximately 3.825 million dollars from the settlement. The case is captioned United States ex rel. Crawford v. Independence Blue Cross in federal court in the Eastern District of Pennsylvania.
IBX is the dominant health insurer in the Philadelphia region. The settlement does not require an admission of liability, and IBX has not admitted wrongdoing. The resolution is part of a continuing pattern of federal enforcement focused on risk adjustment accuracy in Medicare Advantage.
In plain words
Independence Blue Cross, a Pennsylvania health insurer, will pay 22.5 million dollars to settle a federal lawsuit. The government says the company reviewed patient records. It used those reviews to find billing codes that increased its Medicare payments. But when the same records showed it had been overpaid, the company did not give that money back. A former employee reported the problem to the government and will receive about 3.8 million dollars as a reward. The company has not admitted any wrongdoing.
Understand the basics first
Source: DOJ
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