Monogram Health to Pay $2.4 Million to Settle Medicare Advantage False Claims Allegations
Key Takeaways
- Monogram Health has agreed to pay approximately $2.4 million to resolve False Claims Act allegations involving inaccurate diagnosis codes submitted for Medicare Advantage beneficiaries.
- Federal officials alleged the codes inflated beneficiary risk scores, resulting in higher capitated payments from the Centers for Medicare & Medicaid Services (CMS) to Medicare Advantage organizations.
- The case originated from a whistleblower lawsuit filed by a former Monogram physician, who will receive $386 225 from the settlement.
Monogram Health Professional Services PC and Monogram Health Inc have agreed to pay approximately $2.4 million to resolve allegations that the companies violated the False Claims Act by submitting inaccurate diagnosis codes that increased payments under the Medicare Advantage program, according to the US Department of Justice (DOJ).
The settlement resolves allegations involving diagnosis codes submitted between January 1, 2021, and December 31, 2023. The DOJ emphasized that the claims resolved by the settlement are allegations only and that there has been no determination of liability.
Allegations Center on Medicare Advantage Risk Adjustment
Under Medicare Advantage, also known as Medicare Part C, CMS makes capitated payments to private Medicare Advantage Organizations (MAOs) for beneficiaries enrolled in their plans. CMS adjusts these payments based in part on beneficiaries' health status using the Hierarchical Condition Category (HCC) risk-adjustment model.
Generally, beneficiaries with more severe or costly medical conditions receive higher risk scores, resulting in higher payments to MAOs. Diagnosis codes used for risk adjustment must be supported by patients' medical records.
Monogram provides in-home care and related services to Medicare Advantage beneficiaries through contracts with certain MAOs. According to the settlement agreement, Monogram could receive higher payments from the MAOs when beneficiaries under its care have higher risk scores, creating a financial incentive to submit additional diagnosis codes.
The government alleged that Monogram knowingly submitted diagnosis codes that were not clinically accurate, lacked supporting documentation in beneficiaries' medical records, and/or did not require or affect patient care, treatment, or management.
The allegations involved 4 HCCs: protein-calorie malnutrition, substance use disorder, coagulation defects and other specified hematological disorders, and angina pectoris. According to the government, these codes inflated beneficiaries' risk scores and caused CMS to make higher capitated payments to MAOs than it otherwise would have made.
Settlement Details
Under the settlement agreement, Monogram will pay the US $2 413 909, plus interest at an annual rate of 4.125% beginning April 29, 2026. Of the total settlement amount, $1 419 946 represents restitution.
The agreement also specifies that certain costs associated with the case—including costs related to the government's investigation, Monogram's defense and corrective actions, and the settlement payment—are considered unallowable for purposes of federal health care programs. Monogram may not seek reimbursement for those costs through Medicare, Medicaid, TRICARE, or the Federal Employees Health Benefits Program.
Former Monogram Physician Filed Whistleblower Action
The case originated with a qui tam lawsuit filed in December 2022 by Ajay Gupta, MD, a physician formerly employed by Monogram. Under the False Claims Act's whistleblower provisions, private individuals may bring actions on behalf of the federal government and receive a portion of any recovery.
The settlement agreement provides Gupta with a relator's share of $386 225.
The DOJ said Monogram received credit under its False Claims Act cooperation guidelines. The case was investigated through a coordinated effort involving the DOJ Civil Division's Commercial Litigation Branch, Fraud Section; the US Attorney's Office for the Central District of California; and the Department of Health and Human Services Office of Inspector General.
Why Does It Matter for Pharmacists?
This case highlights the compliance implications of diagnosis documentation and coding within Medicare Advantage and other risk-based health care arrangements.
Pharmacists increasingly work within multidisciplinary care teams, health systems, managed care organizations, and value-based care models where clinical documentation can contribute to the broader patient record. The allegations in this case demonstrate how unsupported or inaccurate diagnoses can affect risk-adjusted Medicare payments and potentially expose participating organizations to federal scrutiny.
For pharmacists involved in medication management, transitions of care, population health, or other integrated care services, accurate documentation of clinical findings and interventions remains an important component of maintaining reliable patient records and supporting appropriate health care reimbursement.
Bottom Line
The $2.4 million Monogram Health settlement resolves allegations that unsupported or inaccurate diagnosis codes inflated Medicare Advantage beneficiaries' risk scores and increased CMS payments to MAOs. The agreement underscores the government's continued use of the False Claims Act to address alleged inaccuracies affecting federal health care payments, although the DOJ stressed that the allegations were not a determination of liability.
References
- US Department of Justice. Medicare Advantage provider Monogram Health agrees to pay $2.4M to settle False Claims Act suit. August 24, 2026. Accessed August 26, 2026. https://www.justice.gov/opa/pr/medicare-advantage-provider-monogram-health-agrees-pay-24m-settle-false-claims-act-suit
- US Department of Justice. Settlement Agreement: United States of America, Monogram Health Professional Services, PC, Monogram Health, Inc., and Dr. Ajay Gupta. US Dept of Justice. August 17, 2026. Accessed August 26, 2026. https://www.justice.gov/opa/media/1458886/dl
