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Kaiser Affiliates Will Pay $556M to Settle a Lawsuit Alleging Medicare Fraud

Five Kaiser Permanente affiliates settled for $556 million over allegations of upcoding Medicare Advantage claims from 2009 to 2018, with whistleblowers receiving $95 million.

  • On Wednesday, five Kaiser Permanente affiliates agreed to pay $556 million to resolve DOJ allegations of improper Medicare Advantage billing, including Kaiser Foundation Health Plan and others.
  • Risk-Adjusted payments from Medicare Advantage rely on diagnostic codes, and last year the government was expected to pay 20% more for enrollees, a $84 billion difference, according to CMS.
  • The Department of Justice alleges Kaiser pressured physicians in California and Colorado to add post-visit addenda with unrelated codes and tied financial bonuses to diagnostic coding despite internal warnings.
  • The settlement stemmed from a False Claims Act suit filed by Ronda Osinek, former data quality trainer, and Dr. James Taylor, former medical director, who will receive $95 million.
  • CMS expanded audits last year to crack down on overpayments despite court setbacks, while CMS Administrator Dr. Mehmet Oz pledged scrutiny and a Senate report accused UnitedHealth of `gaming` MA risk adjustment.
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Kaiser affiliates will pay $556M to settle a lawsuit alleging Medicare fraud

Kaiser Permanente affiliates will pay $556 million to settle a lawsuit that alleged the health care giant committed Medicare fraud and pressured doctors to list incorrect diagnoses on medical records to receive higher reimbursements.

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Newsmax broke the news in Washington, United States on Wednesday, January 14, 2026.
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