The Department of Justice announced on September 30 the $22.5 million Independence Blue Cross will pay to resolve allegations about Medicare Advantage diagnosis codes, and the allegations center on a question every plan with a chart review program faces: what happens after the review finds a code the chart does not support. DOJ alleges Independence Blue Cross ran a retrospective chart review program from 2016 through 2020 which added diagnosis codes but did not investigate or delete unsupported codes the program identified, and the plan then certified its risk adjustment data as accurate. Independence Blue Cross did not admit wrongdoing and said the matter involved differing views on documentation and reporting requirements under the MA risk adjustment program.
What the government alleges
The case began with a 2020 whistleblower complaint from a former Independence Blue Cross employee, who alleged the company collected tens of millions of dollars through upcoding. Assistant Attorney General Brett Shumate said DOJ will hold insurers accountable when they knowingly retain payments based on inaccurate diagnoses. The settlement resolves allegations only, and Independence Blue Cross settled to avoid prolonged litigation.
Chart review programs exist to find diagnoses a plan did not capture, and nothing in the allegations challenges this purpose. The allegations focus on the other direction, where a review identifies a code the record does not support and the plan leaves the code in place. In DOJ's telling, a program built only to add codes produces risk scores weighted one way, and the data the plan certifies to CMS carries the result.
How this fits the enforcement pattern
The settlement follows Kaiser Permanente's $556 million resolution earlier this year and arrives alongside HHS Office of Inspector General reports documenting upcoding concerns across Medicare Advantage. At $22.5 million, the Independence Blue Cross settlement is far smaller than Kaiser's, and the case involves a regional Blue plan, which shows enforcement reaching plans of different sizes and structures. Our coverage of the Villages Health settlement examined the documentation standard from the provider side, and this case approaches the same standard from the plan side.
What this means for your plan
For compliance officers, the allegations place the closing of the loop under scrutiny, meaning the documented steps between a chart review finding and a corrected submission. A program with written criteria for investigating unsupported codes, a record of the deletions made, and a clear link from those results to the certification process answers the question DOJ raised, while a program without this record leaves the plan describing intent after the fact.
For risk adjustment leaders, vendor arrangements fall inside the same question. Contracts paying on codes added and saying little about codes removed shape what a chart review program finds and reports, and the vendor evaluation series from Upward Growth, which began October 2, explains why RAF lift and coder productivity no longer describe a program's regulatory fit. The same documentation discipline supports RADV readiness, since audit outcomes depend on whether the record behind each submitted diagnosis holds up.
Plans reviewing how their programs handle unsupported findings now do so on their own timeline, ahead of any outside inquiry, and the review itself gives compliance, risk adjustment, and analytics teams a shared set of facts about where the program stands today.
The 27th Risk Adjustment Forum brings these questions into one room. The event runs October 27 to 29 at the Hyatt Regency Orlando, with sessions on building an audit-ready operating model with Jeannie Hennum of Verisma, prospective clinical documentation improvement with Dawn Carter of Centauri, regulatory and legislative priorities for managed care oversight, and a hands-on RADV audit simulation workshop. Learn more about the Risk Adjustment Forum.