Kaiser Permanente Affiliates to Pay $556M in False Claims Act Settlement Over Medicare Advantage Coding Practices

Affiliates of Kaiser Permanente have agreed to pay $556 million to resolve allegations that they violated the False Claims Act by submitting inaccurate diagnosis codes in connection with Medicare Advantage risk adjustment payments. The settlement announced in January 2026 resolves consolidated government and whistleblower-led complaints, which allege that Kaiser systematically pressured physicians to add diagnoses to patient records after visits to increase Medicare Advantage reimbursements. The resolution includes one of the largest recoveries in a Medicare Advantage False Claims Act matter, and approximately $95 million of the total will be shared with whistleblowers who brought the qui tam actions.

Under the Medicare Advantage (Part C) program, payment amounts to health plans are adjusted based on documented patient diagnoses. Federal authorities alleged that, between 2009 and 2018, Kaiser used data mining and post-visit “addenda” practices to add diagnoses that were not considered or addressed during actual patient encounters, resulting in inflated Medicare payments. The government emphasized that accurate diagnosis coding is critical to the integrity of the Medicare Advantage program and that plans must submit truthful and medically supported information to avoid overpayment. Kaiser did not admit wrongdoing but agreed to settle to avoid protracted litigation.