DOJ alleges the Brentwood company submitted unsupported diagnoses that increased Medicare Advantage payments. The claims remain allegations, and although Cigna and Humana are identified in the underlying whistleblower case, the public still does not know how many patients, codes or dollars were involved.
By The Redemption Project Newsroom
Health Care / Follow the Dollar / Systems Explained
NASHVILLE, Tenn. — In Medicare Advantage, a diagnosis is not only part of a patient’s medical record. It can also change how much money the federal government pays a private health plan and, under some contracts, how much that health plan pays a medical provider.
That financial chain is at the center of a $2.4 million False Claims Act settlement involving Monogram Health, a rapidly growing in-home health company headquartered in Brentwood.
The Justice Department alleges that between 2021 and 2023, Monogram knowingly submitted diagnosis codes that were clinically inaccurate, unsupported by beneficiaries’ medical records or unrelated to the care, treatment or management provided during the patient encounter. DOJ says the codes increased Medicare Advantage risk scores, causing the Centers for Medicare & Medicaid Services to pay private health plans more than it otherwise would have.
Monogram agreed to pay $2,413,909, plus interest, to resolve the allegations. DOJ says the claims remain allegations and there has been no determination of liability. The department’s updated release also says Monogram received credit under Justice Department guidelines that take cooperation into account in False Claims Act cases, although DOJ did not publicly describe the cooperation for which credit was given.
The settlement tells the public what Monogram will pay. It does not disclose how many beneficiaries or diagnosis codes were involved, the total increased payments CMS made because of those codes or how much of that money ultimately reached Monogram.
Those missing numbers matter because understanding this case requires understanding how a diagnosis becomes revenue.
How the money moved
Medicare Advantage, also known as Medicare Part C, allows beneficiaries to receive Medicare coverage through private insurance plans rather than traditional fee-for-service Medicare.
CMS generally pays each Medicare Advantage organization a monthly amount for every enrolled beneficiary. That payment is adjusted for expected health costs, with higher payments for patients whose documented medical conditions suggest they will require more expensive care.
The system has a legitimate purpose. Without risk adjustment, health plans could have a financial incentive to attract healthier members while avoiding people with complicated and costly medical conditions.
Diagnoses help determine those risk scores.
Monogram was not the insurer receiving CMS’s initial payment. It provided in-home care to Medicare Advantage beneficiaries under contracts with private Medicare Advantage organizations. According to DOJ, those agreements included risk-sharing arrangements that made Monogram eligible to receive more compensation when its patients had higher risk scores because the health plans themselves first received higher CMS payments.
The chain therefore worked in stages: a diagnosis could affect a patient’s risk score; the risk score could affect CMS’s payment to a Medicare Advantage plan; and the plan’s payment could, under a risk-sharing contract, affect Monogram’s compensation.
That is the financial incentive federal investigators examined.
Four categories of diagnoses
The government’s allegations involve four Hierarchical Condition Categories, or HCCs: protein-calorie malnutrition, substance use disorder, coagulation defects and other specified blood disorders, and angina pectoris.
DOJ alleges Monogram knowingly submitted codes in those categories that were clinically inaccurate, unsupported by medical records or did not require or affect the patient’s care, treatment or management during the encounter. The government says those codes inflated beneficiaries’ risk scores and caused CMS to make higher payments to Medicare Advantage plans.
The public settlement does not explain how the disputed diagnoses were generated. It does not say whether they originated during in-home assessments, chart reviews, electronic prompts, coding reviews, individual clinical decisions or some combination of those processes.
Those distinctions matter because federal regulators have identified each of those areas as potential risk points throughout Medicare Advantage.
HHS-OIG’s 2026 Medicare Advantage compliance guidance warns about unsupported diagnoses generated through chart reviews or in-home health assessments, electronic prompts — including prompts generated by artificial intelligence — and provider submissions that can increase payments under risk-sharing arrangements. The guidance also recommends auditing diagnosis data, identifying coding outliers and strengthening oversight when providers or contractors have compensation tied to risk-adjustment results.
Those warnings apply to the Medicare Advantage system generally. They are not findings about how Monogram generated the diagnoses in this settlement.
That remains an unanswered question.
Cigna and Humana appear in the underlying case
The public settlement describes Monogram’s contracts with Medicare Advantage organizations but does not name the insurers.
The underlying whistleblower case provides more information.
Healthcare Dive reported Wednesday that the unsealed complaint identifies Cigna and Humana as Medicare Advantage insurers that contracted with Monogram. A spokesman for the U.S. Attorney’s Office for the Central District of California confirmed that neither insurer is a party to the Monogram settlement.
That does not establish wrongdoing by either insurer.
It does clarify the next accountability question.
Medicare Advantage organizations are responsible for the risk-adjustment information they submit to CMS. HHS-OIG says plans should audit diagnosis information before and after submission, investigate outliers and take corrective action when unsupported diagnoses are discovered.
The public still does not know how many disputed Monogram diagnoses went through Cigna or Humana, how much additional CMS money either plan received, what auditing occurred or whether any payments were returned.
Those questions now belong with the insurers as well as the provider.
What the $2.4 million represents
The settlement agreement is more precise than DOJ’s rounded headline.
Monogram agreed to pay $2,413,909, plus annual interest of 4.125% accruing from April 29. Of the principal settlement amount, $1,419,946 is expressly designated as restitution.
The agreement does not separately label the remaining $993,963 as a fine or civil penalty. Without clarification from DOJ, it should not be described as one.
The case began with a whistleblower lawsuit filed in December 2022 by Dr. Ajay Gupta, a physician formerly employed by Monogram. Under the False Claims Act’s qui tam provisions, a private individual can sue on behalf of the United States and receive part of a government recovery.
The settlement provides Gupta $386,225, or approximately 16% of the principal settlement amount.
The agreement also references a separate May 7 settlement resolving Gupta’s other claims against Monogram, including a whistleblower-retaliation claim and claims for fees and costs. Those terms are not contained in the public federal settlement, and their resolution does not establish that retaliation occurred.
A large Tennessee health company
Monogram’s Tennessee connection is substantial.
The company lists its headquarters at 5410 Maryland Way in Brentwood. Former U.S. Senate Majority Leader Bill Frist, a physician and Nashville health care investor, serves as board chairman.
Monogram reported more than $3 billion in 2024 revenue and said last year that it anticipated $5 billion in revenue for 2025. Its Aug. 17 impact report says the company now serves more than 220,000 patients across 33 regional markets. Those are company-reported figures rather than numbers established by the federal settlement.
It can be tempting to compare a $2.4 million settlement directly with a multibillion-dollar company’s annual revenue and decide whether the payment is large or small.
That is not the most useful denominator.
The more meaningful comparison is between the settlement and the financial effect of the covered conduct: how much CMS overpaid Medicare Advantage organizations and how much Monogram ultimately received because of the disputed diagnoses.
Those figures are not disclosed in the settlement.
Without them, the public cannot independently evaluate how the $1.42 million restitution amount was calculated.
The issue extends far beyond one company
Medicare Advantage now covers more than half of eligible Medicare beneficiaries. MedPAC reported that 34.9 million people, about 55% of eligible beneficiaries, were enrolled in 2025, when Medicare paid approximately $537 billion to Medicare Advantage plans. Payments are projected to reach about $615 billion in 2026.
That scale makes risk adjustment enormously consequential.
MedPAC has repeatedly raised concerns about coding intensity — the tendency for Medicare Advantage beneficiaries to accumulate more documented diagnoses than comparable beneficiaries in traditional Medicare. More complete documentation can be legitimate and clinically useful, while unsupported coding can cross into improper or fraudulent conduct.
Those concepts should not be conflated.
MedPAC projects that differences associated with coding intensity will increase Medicare Advantage payments by approximately $22 billion in 2026, even after CMS’s coding adjustment. That figure is not an estimate of $22 billion in fraud. It measures a broader payment effect created by differences in diagnostic coding.
The Monogram settlement concerns something narrower: DOJ’s allegations about specified unsupported diagnoses and the payments tied to them.
The larger Medicare Advantage system explains why the incentive exists.
Compliance is supposed to determine whether the diagnosis is legitimate.
The plan and provider both have responsibilities
HHS-OIG’s new Medicare Advantage guidance makes clear that risk-adjustment compliance does not end when a provider sends data upstream.
CMS requires Medicare Advantage organizations to monitor the accuracy of the risk-adjustment information they submit. OIG recommends audits before and after submission, scrutiny of high-risk diagnosis codes, oversight of in-home assessments and chart reviews, review of software and electronic prompts, and stronger monitoring when a contractor’s compensation is tied to risk scores or diagnosis capture.
That creates two layers of accountability in this case.
The first concerns Monogram and the diagnoses DOJ alleges it submitted.
The second concerns the plans that received those diagnoses, certified data to CMS and received the corresponding federal payments.
Identifying Cigna and Humana in the underlying case does not establish that either violated its obligations.
It gives the public a clearer place to ask what those obligations looked like in practice.
What patients and taxpayers still do not know
The settlement does not disclose whether any beneficiary paid more, received different treatment or experienced a coverage consequence because of a disputed diagnosis.
It also does not say whether the challenged diagnoses remain in beneficiaries’ medical records, whether affected patients were notified or whether corrected risk-adjustment information was submitted to CMS.
Those questions should not be answered by speculation.
They should be answered by Monogram, the involved health plans and the federal agencies that investigated the case.
Monogram also should explain what changed after the covered 2021-23 period: how clinicians and coders are trained, whether risk-adjustment coding has undergone independent audit, how unsupported diagnoses are removed and whether compensation or performance measures remain tied to diagnosis capture or risk-score growth.
DOJ and HHS-OIG should explain how the restitution figure was calculated, how many beneficiaries and diagnoses were included, what additional CMS payments were associated with the covered conduct and whether the involved health plans returned money.
And patients deserve a particularly basic answer: If a diagnosis was determined to be unsupported or clinically inaccurate for risk-adjustment purposes, who makes sure the patient’s medical record is accurate now?
Value-based health care is built on the idea that providers can improve outcomes by coordinating care, managing chronic disease and intervening before patients reach a hospital.
Risk adjustment is part of making that system financially workable.
But whenever a diagnosis can also increase revenue, the safeguards have to make sure the money follows the medicine rather than the other way around.
The code should follow the care. The care should not follow the code.
Behind the Reporting: The Numbers the $2.4 Million Settlement Does Not Show
Paid subscribers get a closer look at the source documents, discrepancies and unanswered questions behind this report.
The Justice Department’s headline gave us a settlement amount.
The settlement agreement made us more interested in the numbers DOJ did not give us.
