Healthcare fraud makes up a sizable majority of False Claims Act (FCA) settlements and judgements. For the 2022 Fiscal Year, the U.S. Department of Justice reported that $1.7 billion of the total $2.2 billion collected under the FCA stemmed from healthcare fraud cases. False Claims Act healthcare cases often involve efforts to defraud federal healthcare programs like Medicare, Medicaid, and TRICARE.

A recent massive FCA settlement against Cigna Group highlights a particular healthcare area with potential for large-scale fraud: Medicare Advantage (Medicare Part C). Under the FCA’s qui tam provisions, individuals who blow the whistle on Medicare Advantage fraud can earn millions of dollars for exposing the wrongdoing.

Medicare Advantage, also known as Medicare Part C or MA, is a form of Medicare coverage offered by a private insurer in contract with Medicare. Medicare Advantage has grown in recent years, and now 50% of all Medicare enrollees are in Medicare Advantage plans.

There’s a common misconception that Medicare Advantage Plans are private insurance plans because the big insurers run them and they are indistinguishable from private insurance. However, the private insurers enter into 2-year contracts with the government to provide regular Medicare coverage as part of the Medicare Advantage plans. A fraud on Medicare Advantage is a fraud on Medicare.

On September 30, the DOJ announced a $172 million settlement with Cigna Group resolving allegations that the company engaged in widespread risk adjustment fraud. The government claims that Cigna defrauded Medicare by submitting inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees in order to obtain inflated payments for the Centers for Medicare and Medicaid Services (CMS).

“Over half of our nation’s Medicare beneficiaries are now enrolled in Medicare Advantage plans, and the government pays private insurers over $450 billion each year to provide for their care,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “We will hold accountable those insurers who knowingly seek inflated Medicare payments by manipulating beneficiary diagnoses or any other applicable requirements.”

Alongside risk adjustment fraud, companies engaged in Medicare Advantage fraud may be partaking in fraudulent actions such as upcoding, paying kickbacks, and billing for services not rendered.

Some of the allegations in the Cigna settlement stemmed from a qui tam whistleblower lawsuit filed by Robert A. Cutler, a former part-owner of a vendor retained by Cigna to conduct home visits. The FCA’s qui tam provisions allow individuals with knowledge of fraud against the government to file lawsuits on behalf of the government. The government then has the opportunity to intervene and take over the case.

Regardless of whether the government intervenes in a qui tam suit, the whistleblower is entitled to 15 and 30% of the government’s recovery in a successful case. In the Cigna case, Cutler is set to receive $8 million for blowing the whistle on Medicare Advantage fraud.

The FCA’s qui tam provisions have been immensely successful for the both the government and whistleblowers, with over $72 billion recovered from fraudsters and over $6 billion awarded to whistleblowers.

As Medicare Advantage plans become more and more prevalent, the DOJ will continue to pursue cases against fraud in that area. As with all aspects of FCA enforcement, whistleblowers will play a key role in this effort, and stand to make millions for exposing fraud.

Geoff Schweller also contributed to this article.