Elevance pays CMS $342M to avoid a Medicare Advantage risk-adjustment sanction

Finding a diagnosis code the chart won't support is the start of the job, not the end. A government letter filed June 22 in the pending False Claims Act case against Anthem disclosed that the insurer, now Elevance Health, wired $342,209,085.30 to CMS to avoid a Medicare Advantage sanction over how it handled risk-adjustment data corrections. The dollar figure isn't the point. The process behind it is.

What the $342 million was for

CMS issued Elevance a Notice of Intermediate Sanctions on February 27, 2026. According to the government's letter, CMS acted over the plan's "substantial and persistent noncompliance with Medicare Advantage risk adjustment data submission requirements," specifically a failure to "submit data corrections for diagnosis codes it identified as unsupported by medical record documentation through CMS's required electronic systems."

To avoid the sanction, Elevance submitted the data corrections by CMS's deadline and transmitted the $342,209,085.30. The government's letter says CMS has "already recouped over $300 million" from the insurer and is "likely to recover substantially more," and that Elevance's own SEC filing put its total exposure tied to the sanction at about $935 million.

The compliance step CMS said was missing

This is the part that lands on a coder's desk. By the government's account, Elevance did identify the problem codes. What it allegedly didn't do was clear them the way CMS requires.

The detail that makes the story land is mundane. For nearly seven years, from November 2018 to October 2025, the government says the plan's answer was to send CMS seven letters offering the corrections on external flash drives. CMS sent six letters back. Each one told the plan to correct the data through its official electronic systems.

The backstory is short. After the Ninth Circuit's 2016 Swoben decision, the government says, the plan began comparing its retrospective chart review results against codes it had already reported to CMS, which it says surfaced diagnoses the review couldn't substantiate. Identifying them wasn't the problem. Deleting them through CMS's systems was.

A 2024 CMS letter, quoted in the filing, spelled out the rule. When a plan has information that a diagnosis is unsupported, "the corresponding overpayment must be reported and returned within 60 days of identification in accordance with section 1128J(d) of the Act," and "sending encrypted files with correspondence to CMS does not satisfy" the obligation.

In its letters to the plan, CMS wasn't ambiguous. Knowing a code is bad doesn't clear the overpayment. Correcting it through the electronic systems does.

The allegations behind the case

The payment sits on top of a False Claims Act case the government filed in 2020, when the company was still Anthem. The complaint alleges that from 2014 through 2018 Anthem ran a "retrospective chart review" program through a vendor, used it to add diagnosis codes that raised risk-adjustment payments, then knowingly failed to delete codes the review couldn't support while falsely attesting each year that its data was accurate. The DOJ release says the program generated revenue that "frequently exceeded $100 million per year" and that Anthem treated it as a "cash cow."

Those are allegations. The case is still in discovery and there has been no determination of liability.

What's still in dispute

Elevance isn't done fighting. In a separate administrative proceeding it's challenging the Notice itself, and in the litigation it argues that CMS's years of inaction undercut the government's claim that the coding mattered. The plan has gone further, arguing that CMS issued the Notice to "manufacture proof to bolster" the False Claims Act case, a characterization the government disputes. In public reporting on the filing, Elevance has called the CMS action unprecedented and denied wrongdoing.

The $342 million doesn't resolve the False Claims Act case. By the government's account, it brings the plan into compliance with the sanction for now, and CMS expects to recoup more.

Why this lands on your desk

You may never touch a data-correction file, but the obligation behind it runs straight through your work. Once your review flags a diagnosis the record won't support, the work isn't finished. The report-and-return clock is running, and only a correction through CMS's official process actually clears the overpayment.

That is also the case for two-way review.

A program that only adds codes is the exact pattern the government describes here and in the Kaiser $556M resolution and the Matrix and HealthFair settlement. The clean version adds the supported diagnoses and deletes the ones the record can't back. If you want the standard those calls run on, the MEAT criteria reference covers what Monitored, Evaluated, Assessed, or Treated requires before a diagnosis is reportable, and the problem-lists-alone breakdown covers why a carried-forward entry isn't support.