HHS OIG Audits Uncover $178 Million in Unsupported Medicare Advantage Diagnosis Codes by Humana and UnitedHealthcare

September 18, 2026 — The federal crackdown on Medicare Advantage (MA) billing practices is intensifying. According to newly released mid-September 2026 audits from the Department of Health and Human Services Office of Inspector General (HHS OIG), Humana and UnitedHealthcare of Wisconsin are facing accusations of submitting unsupported Medicare Advantage diagnosis codes, generating an estimated $178 million in combined overpayments.

For medical coding and billing professionals, these audits highlight the immense regulatory scrutiny surrounding "upcoding"—the practice of submitting diagnosis codes that exaggerate a patient’s health needs to trigger higher reimbursement through the Centers for Medicare & Medicaid Services (CMS) risk adjustment program.

Breaking Down the $178 Million Overpayment

The HHS OIG audits focused on the 2020 and 2021 payment years, targeting high-risk diagnosis groups that are historically prone to miscoding. The watchdog agency estimated that:

• HumanaChoice (a massive PPO plan administered by Humana Inc.) received at least $130.9 million in overpayments. In a sample of 220 enrollee-years, investigators found that 178 lacked the medical record documentation necessary to support the submitted codes—an 81% error rate.
• UnitedHealthcare of Wisconsin received an estimated $46.9 million in overpayments due to similar documentation shortfalls.

Combined, these alleged overpayments total nearly $178 million, prompting the OIG to recommend that both insurers refund the federal government and overhaul their internal compliance procedures.

The Coding Disconnect: Active vs. Historical Conditions

At the heart of the OIG's findings is the Medicare Advantage Hierarchical Condition Category (HCC) coding system. Under this model, CMS pays insurers a capitated monthly amount that is adjusted based on the health status of the enrollee. Sicker patients with complex, chronic, or acute conditions require more resources, leading to higher payments.

However, the audits revealed a recurring pattern: providers and plans were coding enrollees as having active, acute conditions when the medical records indicated only a history of those ailments.

For example, investigators flagged instances where a patient who had survived a stroke years prior was coded with the ICD-10 code for acute stroke (I63.9, Cerebral infarction, unspecified). To comply with coding guidelines, coders should have used Z86.73 (Personal history of transient ischemic attack (TIA), and cerebral infarction without residual deficits). Because active strokes carry a much higher Risk Adjustment Factor (RAF) score than a historical condition, this discrepancy led to significantly higher, unsupported reimbursement.

High-Risk Targets: Obesity and Heart Failure

While acute stroke miscoding was a primary focus of recent audits, the HHS OIG continuously targets other high-value, high-risk HCC categories where clinical documentation frequently fails to support the billed code.

Two of the most heavily scrutinized codes in the medical coding space include:

• ICD-10-CM code E66.01 (Morbid (severe) obesity due to excess calories): This code is a massive driver of risk-adjusted revenue. However, OIG audits frequently reveal that plans submit E66.01 without the required secondary BMI Z-codes (such as Z68.41) or without clinical documentation proving the provider actually evaluated, monitored, or treated the obesity during the face-to-face encounter.
• I50.9 (Heart failure, unspecified): While this generic code maps to HCC categories, federal auditors often flag it when medical records lack echocardiogram reports or specific details about the type of heart failure (e.g., systolic vs. diastolic, or preserved vs. reduced ejection fraction).

The Insurers' Defense

Despite the HHS OIG's staggering findings, the insurers are not quietly writing checks to the federal government. Both Humana and UnitedHealthcare have pushed back against the watchdog's conclusions.

UnitedHealthcare explicitly rejected the findings, arguing that the OIG's audit methodology was "flawed" and "one-sided." Because the investigators deliberately targeted high-risk diagnoses rather