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Medicare Advantage

AIDS Healthcare Foundation Agrees to Pay 1.44 Million Dollars to Settle Medicare Advantage Diagnosis Code Claims

Federal investigators found the Los Angeles nonprofit maintained unsupported HIV and other diagnosis codes for years, inflating risk-adjusted payments it received from Medicare Advantage.

By the Goodsurance editorial teamOctober 6, 2026

The U.S. Department of Justice announced on October 6, 2026 that AIDS Healthcare Foundation, a nonprofit organization based in Los Angeles, California, agreed to pay 1.44 million dollars to resolve False Claims Act allegations tied to its Medicare Advantage diagnosis code submissions. The settlement covers payment years 2017 through 2023.

According to the DOJ, AHF risk-adjustment coders kept internal spreadsheets listing diagnosis codes they had flagged as potentially unsupported by patient medical records. CMS rules require Medicare Advantage organizations to investigate and delete inaccurate codes within 60 days of identifying them. Investigators found that AHF did not consistently meet that deadline. Separately, for payment year 2017, AHF submitted HIV diagnosis codes where the underlying diagnosis was not documented in a face-to-face visit record, as federal rules require.

A Medicare Advantage nonprofit agreed to pay 1.44 million dollars over diagnosis codes that were not backed up by patient medical records.

The case began under the whistleblower provisions of the False Claims Act. Donna Irons, a former AHF risk-adjustment coder, brought the original complaint. AHF received credit in the settlement for disclosing the problem, cooperating with investigators, and proactively submitting code deletions before the case concluded.

Medicare Advantage plans submit diagnosis codes to CMS, which uses them to calculate risk-adjusted payments. Codes that are unsupported or inflated can increase those payments beyond what is warranted. The AHF settlement follows a series of larger Medicare Advantage coding fraud resolutions reached in recent months, reinforcing DOJ's continuing focus on risk-adjustment accuracy across the program.

In plain words

A large nonprofit in Los Angeles agreed to pay the federal government 1.44 million dollars. The organization is called AIDS Healthcare Foundation. The dispute was about Medicare Advantage billing codes.

Medicare Advantage plans send diagnosis codes to the government. These codes describe a patient's health problems. The government uses them to decide how much to pay the plan. AHF staff found codes in their system that may not have matched real doctor visits. The rules say those codes must be reviewed and removed within 60 days. Investigators say AHF was too slow to do that. For one year, the group also sent in HIV codes that were not backed up by face-to-face visit records.

A former AHF employee told the government about the problem. AHF cooperated and corrected many codes on its own before the case was finished. The government gave credit for that.

This is one of several settlements the federal government has reached this year with Medicare Advantage organizations over the accuracy of their diagnosis codes.

Source: U.S. Department of Justice
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