Aetna, the second-biggest Medicare Advantage company in the Philadelphia area, has agreed to pay $117.7 million to settle claims of false billing, the U.S. Attorney’s Office in Philadelphia announced Wednesday.

Government investigators found that Aetna added diagnosis codes to patient records to generate larger monthly payments for people in its private Medicare plans. The government pays more for sicker patients. Those issues accounted for $106.2 million of the settlement.

In addition, Aetna settled a whistleblower complaint regarding “inaccurate and untruthful diagnosis codes for morbid obesity.” Aetna agreed to pay $11.5 million in that part of the settlement, which resulted from a lawsuit filed in 2024 in Philadelphia by a former Aetna risk-adjustment coding auditor.

“Aetna continues to disagree with the DOJ’s industry-wide allegations, and this settlement should not be seen as an acknowledgment of liability. Instead, we are now able to avoid the uncertainty and further expense of prolonged litigation,” the company said in a statement.

The Aetna Medicare Advantage settlement followed a record $556 million settlement with Kaiser Permanente in January and a $172 million agreement with Cigna in 2023.

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