Federal auditors have concluded that Humana and UnitedHealthcare together collected an estimated $177.8 million in improper Medicare Advantage payments across just two of their contracts, and both insurers have told the government they see no obligation to send any of it back. The Department of Health and Human Services Office of Inspector General examined diagnosis codes the two companies submitted to Medicare for risk-adjustment payments covering 2020 and 2021, then checked those codes against the enrollees’ own medical records. Most of the codes it sampled did not hold up. The finding leaves the disputed money sitting exactly where it already was, inside two of the country’s largest Medicare Advantage insurers.
The HumanaChoice Audit’s $130.9 Million Finding
The inspector general’s review of HumanaChoice, the Medicare Advantage plan Humana administers under contract H5216, is part of a broader series of audits targeting diagnosis codes CMS considers at high risk of being miscoded, since those codes directly raise the monthly payment an insurer collects for a given enrollee. Investigators pulled 220 enrollee-years of HumanaChoice’s submitted diagnoses and checked each one against the underlying medical charts to see whether the documentation actually supported what had been billed to Medicare.
In 178 of those 220 cases, the medical records did not support the diagnosis codes Humana had submitted, producing $669,237 in overpayments inside the sample alone, an error rate of more than four in five of the files auditors checked. Extrapolating that rate across the full contract, auditors estimated Humana received at least $130.9 million in overpayments for the 2020 and 2021 payment years.
The inspector general’s office made four recommendations in its full report on the HumanaChoice audit, including that Humana refund the full $130.9 million, examine 212 additional enrollee-years in one high-risk diagnosis group auditors did not review directly, and check for similar coding problems in years after the audit period, as well as continue tightening the compliance procedures that let the errors through in the first place. Humana disagreed with some of the findings and rejected all four recommendations outright, meaning it has not committed to returning any of the estimated overpayment or to reviewing the additional enrollee-years auditors flagged.
Inside the kit: 51 state Medicare cost-help packs, the new Part D out-of-pocket cap, the prior-authorization appeal steps and a medication and cost tracker. Open The Medicare Cost & Coverage Protection Kit.
UnitedHealthcare of Wisconsin’s $46.9 Million Findings
A parallel audit examined UnitedHealthcare of Wisconsin’s contract H5253, sampling 250 enrollee-years of diagnosis codes the company submitted to CMS for the same 2020 and 2021 payment years. Medical records failed to support the diagnoses in 183 of those 250 cases, an error rate similar to the one auditors found at Humana, and one that produced $722,280 in overpayments within the sample itself before any extrapolation.
Applying that error rate to the full contract, the inspector general’s office estimated UnitedHealthcare received at least $46.9 million in overpayments for the same two-year period, and its full report on the UnitedHealthcare audit again recommended a full refund to the federal government. UnitedHealthcare disagreed with some of the findings and went further than Humana, formally asking the inspector general’s office to withdraw every one of its recommendations rather than simply declining to act on them.
Combined, the two contracts alone account for the $177.8 million figure cited by auditors, a total drawn from just one HumanaChoice contract and one UnitedHealthcare of Wisconsin contract rather than either insurer’s full national Medicare Advantage book. Both companies operate dozens of similar contracts in other states, none of which either of these two reports examined.
Why Two Refusals Leave Medicare’s Payment System Unsettled
Medicare Advantage works by having CMS pay insurers a monthly amount for each enrollee that rises with how sick the government’s records show that person to be, using diagnosis codes the insurer itself collects from its network of doctors and submits for payment. That structure gives an insurer a direct financial incentive to document every code that raises a payment, which is why the inspector general’s office runs an ongoing series of contract-by-contract audits focused on the diagnoses most prone to being overstated.
The recommendations in both reports go beyond a simple repayment demand. Humana was also asked to determine, for 212 enrollee-years in one high-risk diagnosis group the sample never reached, whether medical records support the codes it billed and to refund any additional overpayments those cases turn up, then to keep examining its own compliance procedures. Neither report sets a deadline by which the disputed money must move, and neither insurer has said it will comply with the refund recommendation.
For the millions of people who carry a Medicare Advantage enrollment card rather than traditional Medicare, the dispute plays out entirely between their insurer and the federal government; enrollees are not asked to repay anything and the audits do not change current coverage or premiums. What the reports do show is that two of the largest Medicare Advantage insurers in the country reviewed the same class of high-risk diagnosis codes and reached the same position: reject the recommendation to send the money back.
The Office of Inspector General published both compliance audits on September 15, 2026, after issuing them on September 10, 2026: report A-05-24-00010 covering HumanaChoice’s contract H5216, and report A-07-24-01214 covering UnitedHealthcare of Wisconsin’s contract H5253. Both findings remain open, with the estimated $177.8 million still sitting with the two insurers rather than returned to the federal government, pending whatever action CMS or the inspector general’s office takes next.
What Plan Audits Do Not Change for Members
A federal audit dispute between an insurer and Medicare’s inspector general does not touch the separate set of rules that decide what a Medicare Advantage enrollee actually pays out of pocket, or how a denied prior-authorization request gets appealed. Those mechanics run on their own timelines and forms, none of which either audit report addresses, and nothing about the refund fight changes what shows up on a member’s next explanation of benefits. Enrollees comparing plan costs still need to track the out-of-pocket rules and appeal steps themselves, since no agency prints them alongside a risk-adjustment audit.
The Medicare Cost & Coverage Protection Kit is a 10-page kit that lays out the new Part D out-of-pocket cap and the prior-authorization appeal steps for people weighing Medicare Advantage costs against Original Medicare.
See the prior-authorization appeal steps in The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
