The Villages Health System Agrees to $541.5 Million Medicare Advantage FCA Settlement After Self-Disclosure

On August 26, 2026, the DOJ announced that The Villages Health System LLC (TVH), a health-care provider group based in The Villages, Florida, agreed to a $541.5 million settlement resolving self-disclosed conduct involving diagnosis codes submitted to Medicare Advantage organizations. The government’s press release notes that TVH filed a Chapter 11 bankruptcy petition in July, so it is unclear how much the government will actually receive from the settlement.

According to the DOJ, TVH contracted with Medicare Advantage organizations under arrangements that increased TVH’s reimbursement when beneficiaries had higher risk scores. The government alleges thatTVH knowingly submitted invalid diagnosis codes to the plans and caused inflated payments from the CMS to the plans and, in turn, to TVH.

The allegedly invalid codes lacked adequate support in patient medical records or arose from record amendments that were not initiated by the rendering provider, were untimely, or were not approved by the rendering provider. The covered codes were submitted to Humana, UnitedHealthcare entities, and GuideWell/Florida Blue entities.

TVH disclosed the invalid diagnoses through HHS-OIG’s Health Care Fraud Self-Disclosure Protocol. The DOJ credited TVH for promptly taking remedial action, providing a detailed written disclosure, and cooperating throughout the investigation.

This is the latest in a series of significant FCA settlements involving allegations of Medicare Advantage risk adjustment fraud. Medicare Advantage providers should require rendering-provider involvement in any post-encounter amendment used for risk adjustment, establish firm timeliness and approval rules, and retain evidence linking each diagnosis to a qualifying face-to-face encounter and the care, treatment, or management provided at that visit. Retrospective coding workflows should be audited for amendments added without documented clinician authorization.

The settlement also shows that while self-disclosure can earn cooperation credit, it does not eliminate risk or even substantial exposure.

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