Villages Health System Reaches $541.5 Million False Claims Act Settlement For Inaccurate Coding

On August 26, 2026, the U.S. Department of Justice announced that The Villages Health System LLC (TVH), a healthcare provider group based in The Villages, Florida, agreed to a $541.5 million settlement to resolve allegations under the False Claims Act involving inaccurate diagnosis codes submitted in connection with Medicare Advantage. According to the DOJ, from 2020 through 2024, TVH submitted diagnosis codes to Medicare Advantage Organizations (MAOs) that were not adequately supported by patients’ medical records or were based on untimely or unauthorized amendments to those records. The codes allegedly resulted in higher risk-adjusted payments from the Centers for Medicare & Medicaid Services (CMS) to the MAOs and, in turn, higher payments to TVH. The MAOs are separately returning overpayments to CMS through deletion of invalid codes and agreements with the DOJ and CMS.

The case is also notable because of the credit TVH received for its cooperation. TVH self-disclosed the potentially invalid diagnoses to the HHS Office of Inspector General in December 2024, took remedial steps, provided a detailed written disclosure, and cooperated throughout the government’s investigation. The DOJ specifically identified those actions as factors in resolving the matter.

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