$541.5 Million Settlement: Villages Health to Pay for Medicare Advantage Billing Issues

The Villages Health (TVH), a medical practice serving Florida's retirement community The Villages, has agreed to pay $541.5 million to settle allegations of knowingly submitting false diagnosis codes that resulted in inflated Medicare Advantage payments from 2020 through 2024.

This latest development marks another twist in the saga of TVH's bankruptcy and its impact on thousands of retirees who were initially left without insurance coverage. The company filed for Chapter 11 bankruptcy last year after discovering it potentially owed the federal government hundreds of millions of dollars over Medicare billing problems.

TVH submitted unsupported or otherwise invalid patient diagnosis codes to Humana, UnitedHealthcare, and GuideWell, which then submitted these diagnoses to Medicare. This led to inflated payments from the Centers for Medicare & Medicaid Services (CMS) to the insurers, who in turn made payments to TVH.

The government says that some diagnoses lacked adequate support in patients' medical records while others were based on improper amendments to those records. TVH self-disclosed the problem in late 2024 and cooperated with the subsequent federal investigation, which led to the settlement.

As a result of the agreement, the old TVH entity will have a $541.5 million claim against its bankruptcy estate, and any money that Medicare Advantage insurers return to CMS for the improper diagnoses will be credited against TVH's settlement obligation.