Medicare Advantage Under the Microscope: Enforcement Priorities and Legal Battles — EnforceMintz

Explore 2025 managed care enforcement trends under the Trump administration. Learn about Department of Justice (DOJ) and Centers for Medicare & Medicaid Services (CMS) priorities, Medicare Advantage (MA) risk adjustment cases, key cases interpreting regulatory changes, and compliance strategies for Medicare Advantage Organizations (MAOs).

KEY POINTS:

• Medicare Advantage oversight remains a top priority. DOJ and CMS continue to target risk adjustment practices, coding intensity, and prior authorization abuses in MA plans. Enforcement aims to curb fraud, waste, and abuse while reducing costs.
• Aggressive risk adjustment enforcement and litigation. DOJ is still actively litigating False Claims Act (FCA) cases against major MAOs like UnitedHealthcare, Anthem, and Kaiser, while CMS’s RADV audit expansion was curtailed after a federal court struck down its extrapolation rule.
• New FCA and regulatory challenges are emerging. DOJ intervened in a major qui tam case alleging kickbacks between insurers and brokers, while courts struck down parts of CMS’s 2025 Final Rule on broker compensation and contract terms as well as the RADV Rule, signaling potential ongoing regulatory uncertainty.

This article is part of EnforceMintz: Healthcare Enforcement Trends in 2025 & 2026 Outlook, a series exploring key developments and practical strategies for health care organizations navigating enforcement risks. Read more articles from EnforceMintz to stay current on enforcement trends and compliance strategies.

2025 was an interesting year for enforcement involving Medicare Advantage Organizations (MAOs) and Medicare Advantage (MA) plans. Despite the change in presidential administrations, enforcement in this space remained a top priority. The Department of Justice (DOJ) continued the previous administration’s focus on pursuing MAOs and MA plans under the False Claims Act (FCA). Central to these efforts was the administration’s stated commitment to combating fraud, waste, and abuse, while simultaneously reducing costs through aggressive oversight mechanisms. Policies embedded in the One Big Beautiful Bill and subsequent Centers for Medicare & Medicaid Services (CMS) directives reflect this broader strategy of enhancing program integrity and curbing improper payments, even as critics have warned of potential coverage disruptions and administrative burdens for providers and states.

DOJ underscored its commitment to these enforcement priorities through the record-setting National Health Care Fraud Takedown announced in June 2025. As one example, DOJ announced in the Takedown charges filed against a group of foreign entities and individual executives of Pakistani marketing organizations who allegedly submitted approximately $703 million in fraudulent claims to Medicare and MA plans, and DOJ seized approximately $44.7 million from various bank accounts in connection with that case.

Similarly, in 2025 the Office of Inspector General for the Department of Health & Human Services (OIG) released its Semiannual Report to Congress, highlighting potential systemic vulnerabilities in MA risk adjustment practices by citing its ongoing skepticism of in-home health risk assessments and noting that $13.6 million in overpayments had been identified through risk adjustment audits during the review period. These statements collectively affirm that program integrity — particularly in MA coding and billing — remain an FCA enforcement priority, with agencies pledging increased resources and coordination to protect the public fisc.

Representatives of the administration like Dr. Mehmet Oz, who was confirmed as CMS Administrator in April 2025, echoed this enforcement focus. Though once a vocal advocate for expanding MA coverage, Dr. Oz pledged during his Senate confirmation hearing to scrutinize insurers’ practices, particularly systemic “upcoding” that inflates government spending. He emphasized that MA plans often cost more than traditional Medicare and vowed to clamp down on coding intensity and prior authorization abuses that frustrate patients and providers. True to his word, Dr. Oz pressed insurers in June 2025 to standardize prior authorization rules and reduce care denials, signaling a regulatory approach aimed at balancing MA’s popularity among seniors with fiscal responsibility and transparency.

The administration’s focus on purported improper uses of prior authorization (PA) in managed care is particularly notable in contrast to its apparent growing reliance on this tool in traditional Medicare. While in 2024 and 2025 the use of PA by managed care organizations received significant scrutiny by CMS, states, members of Congress, and the media, the Trump administration announced the WISeR Model in 2025, which expands the use of PA in traditional Medicare. We previously reported on the WISeR Model after it was announced and also discuss the model in this year’s edition of EnforceMintz in “From Innovation to Regulation: Health Care Enforcement Related to AI.”

Closely Watched Ongoing Risk Adjustment Cases Offer Enforcement Insights

For years, we have been following DOJ’s FCA risk adjustment cases against UnitedHealthcare (United or UHC), Anthem, and Kaiser, as these cases could shape future government enforcement in this space and set the standard of due diligence MAOs are expected to uphold when engaging in risk adjustment coding activities. (Find our 2023 and 2024 EnforceMintz articles on these cases here and here.) These three cases progressed steadily throughout 2025, largely without major developments. But on January 14, 2026, DOJ announced a record-setting settlement in the Kaiser case. We expect the Kaiser settlement will intensify DOJ’s focus on risk adjustment cases and investigations in 2026 and beyond.

United States ex rel. Osinek v. Kaiser Permanente

On January 14, 2026, DOJ announced that Kaiser Permanente and certain of its affiliates agreed to pay $556 million to resolve allegations that, from 2009 to 2018, it submitted invalid diagnosis codes for patients enrolled in their MA plans to increase reimbursement rates and obtain higher payments from the government. Specifically, the government’s Complaint-in-Intervention alleged that (1) Kaiser used “data mining” programs to identify missing diagnosis codes and supplement those additional codes via “addenda” to patients’ medical records; and (2) Kaiser used various tactics, including financial incentives, to “pressure” physicians to add diagnosis codes via addenda.

The settlement, in which Kaiser did not admit liability, is the largest MA-related FCA resolution on record. The settlement agreement identified a restitution amount of $278 million, which presumably means that a 2x multiplier — which is standard in FCA settlements — was applied. The settlement also resolves qui tam claims brought by two separate relators, whose share of the settlement will be $95 million.

In its press release, DOJ highlighted that the settlement “sends a clear message” to other MA plans. Given the scale of the settlement and the tenor of the government’s press release, we expect DOJ (and relators) will continue to scrutinize the risk adjustment coding activities of MAOs and MA plans in the years ahead.

United States v. Anthem Inc.

In this case, the government has alleged that Anthem failed to identify and remove inaccurate diagnosis codes as part of its chart review program. As expected, the parties remained in the discovery phase throughout 2025. There was a settlement conference in October 2025 but discovery has continued since that time, with fact discovery scheduled to close on June 30, 2026 and expert discovery on March 8, 2027.

United States ex rel. Poehling v. UnitedHealth Group Inc. et al.

Last year we reported that the litigation between DOJ and United, the country’s largest MAO, reached a key milestone when the parties filed cross motions for summary judgment. On March 3, 2025, the court-appointed Special Master issued a Report and Recommendation (R&R) concluding that the government lacked evidence to support its FCA reverse false claims theory, which is premised on allegations that United failed to delete inaccurate diagnosis codes that it knew were unsupported by the medical records and thus resulted in overpayments. The Special Master recommended that United’s Motion for Summary Judgment be granted and that the government’s Motion for Partial Summary Judgment be denied.

With respect to United’s Motion, the Special Master concluded that the government failed to establish that United received “overpayments” because DOJ provided no evidence that any provider’s diagnosis code was unsupported, as the government did not compare any of the submitted codes against the underlying medical records. The government instead assumed that any code not also identified by United’s code reviewers was unsupported.

The Special Master further concluded that there could be no “knowing or improper avoidance” of any obligation where the government was previously aware of United’s chart review practices. For similar reasons, the Special Master, after concluding that materiality is a required element of all prongs of the reverse false claims provision in the FCA, found that the government had failed to demonstrate “materiality” because it continued to pay United’s claims despite knowing about their chart review practices.

While the involvement of a Special Master in these proceedings is not necessarily notable, the fact that 10 months have passed without the judge having decided whether to adopt, amend, or modify the R&R is. It is not uncommon for a judge to adopt a Special Master’s R&R and to do so promptly after the R&R is issued — so the fact that so much time has passed without a decision by the judge is peculiar. There was a hearing on the R&R on November 19, 2025 and a decision is forthcoming. We, like many others, will read this decision with great interest, as it could have important implications for MAOs dealing with similar issues.

In addition to ongoing risk adjustment–related enforcement against plans, DOJ took risk adjustment–related enforcement action against MA providers this year. For example, in March 2025, Seoul Medical Group Inc., Advanced Medical Management Inc., Dr. Min Young Cha, and Renaissance Imaging Medical Associates Inc. agreed to pay over $62 million to resolve FCA allegations related to the submission of false diagnosis codes. Between 2015 and 2021, Seoul Medical Group and Dr. Cha were alleged to have submitted diagnoses for two severe spinal conditions for patients who did not suffer from either condition. Seoul Medical Group allegedly enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis, resulting in an increase in payment from CMS to the MA Plan, a portion of which the MA plan then passed along to Seoul Medical Group. This is yet another example of the administration’s continued focus on risk adjustment activities conducted by entities other than MA plans themselves, including vendors supporting these efforts.

DOJ Criminal Investigation of United’s MA and Other Businesses Made Headlines in 2025

While there were some potentially positive developments in DOJ’s civil matter against United, the press began reporting in May 2025 that DOJ was conducting a criminal investigation of United, potentially regarding the company’s MA-related business practices, including its practices related to diagnosis codes. United apparently became aware of this investigation the same way that we did, as the company disclosed in a Form 8-K filed with the SEC in July 2025 that it had “proactively reached out to [DOJ] after reviewing media reports about investigations into certain aspects of the Company’s participation in the Medicare program” and had begun “complying with formal criminal and civil requests” from DOJ.

Media accounts of the potential allegations being investigated by DOJ have varied, with some outlets reporting that the investigation may extend beyond United’s MA practices to the practices of Optum Rx, United’s pharmacy benefit manager, as well as United’s reimbursement of its own physicians. We will be watching closely as this investigation continues to unfold, as it could represent a first-of-its-kind criminal investigation of a major insurer in this space.

Two Federal Courts Limited or Struck Down CMS Final Rules Applicable to MAO Audits and MA Marketing and Communication Rules

Humana Inc. et al. v. Beccera

While many of the closely watched risk adjustment investigations and litigations continued without major developments in 2025, the US District Court for the Northern District of Texas offered the MA industry a significant victory through its decision in Humana Inc. et al. v. Beccera. (We covered this decision in a previous post.) Humana brought this case in 2023, challenging a CMS final rule that allowed the agency to audit a small sample of MA enrollees and then use statistical extrapolation to calculate alleged overpayments across the entire contract population, which CMS could then seek to recover. This rule is sometimes referred to as the risk adjustment validation rule (RADV Rule).

Humana raised several substantive challenges to the RADV Rule, but the court based its decision to grant summary judgment to Humana and invalidate the entire rule on CMS’s failure to comply with the Administrative Procedure Act (APA) when issuing the RADV Rule. The court found that the final rule was not a “logical outgrowth” of the proposed rule and thus the public had not had a fair opportunity to comment on the RADV Rule as required under the APA. On November 21, 2025, CMS appealed the decision.

The MA industry was understandably concerned about the RADV Rule when it was issued in 2023, given the potential financial implications of CMS extrapolating findings from a small sample across an entire population of enrollees. And after the rule took effect, many MAOs were subject to audits under the RADV Rule and took steps to repay amounts extrapolated under the rule. With the rule struck down and CMS’s appeal pending, it is unclear what comes next.

For example, in May 2025, CMS announced a dramatic expansion of RADV audits for MA plans, aiming to review all 550 active contracts annually. This plan would have resulted in an increase of more than six times the number of audits CMS typically conducts. CMS’s stated plan was to complete all RADV audits for payment year (PY) 2018 – PY 2024 by early 2026, but as of the date of this publication, CMS appears to be far behind this goal. By some accounts, CMS has not yet issued RADV notices for PY 2020, let alone later years.

It is unclear whether CMS is taking the posture of this case into account when approaching RADV audits. If CMS continues with audits while its appeal is pending, the agency would be limited to recouping only for errors identified in the records that are part of the audit sample. CMS would face these same limitations if it loses its appeal. If CMS wins its appeal, it could resume using extrapolation when resolving audit findings. For now, MAOs will have to continue waiting to see what comes next.

Americans for Beneficiary Choice v. HHS and Council for Medicare Choice v. HHS

In August 2025, a federal district judge in the Northern District of Texas struck down portions of CMS’s 2025 Final Rule issued in April 2024. The rule contained many changes to CMS’s MA and Part D marketing and communication rules, including provisions relating to contracts between plan sponsors and brokers and agents. The plaintiffs challenged three key components of the changes pertaining to brokers and agents: (1) the $100 per enrollment limit on administrative payments to agents (the Fixed Fee), (2) the ban on contract terms that create incentives that may inhibit an agent’s ability to objectively assess and recommend a plan that best fits the Medicare beneficiary (Contract-Terms Restriction), and (3) the prohibition against third-party firms, including brokers, agents, and third-party marketing organizations, from sharing a beneficiary’s data with any other organization for purposes of marketing without the beneficiary’s express consent (Consent Requirement). The court vacated the Fixed Fee and the Contract-Terms Restriction as exceeding CMS’s authority under 42 U.S.C. § 1395w-21(j)(2)(D), which grants CMS power to establish “guidelines” to ensure that the “use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.”

Specifically, the court found that the Fixed Fee provisions went beyond the statutory term “use of compensation.” Under the statute’s plain language, CMS may only regulate how agents and brokers put compensation into action, but not the rate of compensation itself. Then, the court found that CMS does not have the power to regulate administrative payments as “compensation” because “administrative payments” are separate reimbursements for overhead and other costs, distinct from “compensation” for services provided in facilitating the enrollment process. For similar reasons, the court concluded that the Contract-Terms Restriction also exceeds CMS’s authority because it regulates administrative payments, which are not “compensation” under the statute. Finally, the court affirmed its previous determination that the Fixed Fee and the Contract-Terms Restriction were arbitrary and capricious under the APA.

The decision leaves intact only the Final Rule’s Consent Requirement, with which plans began requiring their vendors to comply for plan year 2025. The pre-2025 regulatory framework, which includes less-specific restrictions on administrative payments and contract terms, otherwise remains in place.

This decision is important when considering the government’s potential positions in United States ex rel. Shea v. eHealth Inc. et al., a case in which DOJ partially intervened in May 2025. DOJ’s complaint in Shea alleges that from 2016 through at least 2021, three health insurers (Aetna Inc., Elevance Health Inc., and Humana Inc.) and three large insurance brokers (eHealth Inc., GoHealth Inc., and SelectQuote Inc.) paid kickbacks to brokers in exchange for enrollments into the insurers’ MA plans in violation of the federal Anti-Kickback Statute (AKS).

Among other things, the court in Shea will likely consider whether an individual’s decision to enroll in an MA plan constitutes a “good, item, or service” under the AKS and whether conduct that results in an individual not enrolling in a given MA plan can implicate the FCA. We are watching this case closely because the answers to both of these definitional questions about whether and how the AKS and FCA are triggered could have tremendous importance that extends far beyond MAOs and MA plans.

Looking Ahead in 2026

Based on actions taken by CMS, OIG, and DOJ in 2025, all three agencies likely will continue to focus on managed care in 2026. We believe that enforcement activity will in part be a continuation of what we have seen for years: risk adjustment investigations, potential settlements, and MAOs trying to determine if they have applied the “right” amount of diligence when developing and implementing their processes that result in or review risk adjustment data. But the agencies also are likely to continue branching out into other regulatory risk areas, such as marketing, utilization review, provider relationships, and, based on CMS statements over the last 18 months, vertical integration between payors and providers. Like all enforcement actions, investigations that relate to managed care will be increasingly driven by data analysis and outlier identification, particularly as these agencies continue to incorporate artificial intelligence in their investigatory toolkits.

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