Kaiser Permanente just paid $556 million in the largest Medicare Advantage fraud settlement in history.
The DOJ proved overbilling totaling ~$1 billion from 2009-2018.
Kaiser kept $444 million even after the settlement.
That is not all. Let us look deeper.
The DOJ documented ~500,000 questionable diagnoses over 9 years. Kaiser has 1.9 million Medicare Advantage members. That’s roughly 55,000 diagnoses per year that investigators could definitively prove were added improperly.
What about the ones they couldn’t prove?
Former employees testified that Kaiser “meticulously tracked” physician coding performance and that those who didn’t hit targets faced “financial and professional consequences.”
When you build a system that incentivizes diagnoses, the provable fraud is just the tip of the iceberg.
We estimate Kaiser’s MA revenue at $25-28 billion annually. The DOJ’s $1B finding represents 0.4% of that over the 9 years.
Does anyone believe a systematic, physician-pressure-driven coding operation captured just 0.4% in excess revenue?
I don’t. I am pretty sure someone would lose their job if that were all a possibly illegal system produced over a decade.
This is why Ten Ten Ten focuses on system redesign rather than enforcement. You cannot enforce your way out of a payment model that attaches a dollar sign to every diagnosis code.
Until the system changes, every health system in America faces the same math Kaiser did—and most are making the same choice.
The question isn’t “was Kaiser bad?”
The question is: “What payment system would make this behavior irrational?”
MedicareAdvantage #HealthcareReform #TenTenTen #RiskAdjustment #HealthPolicy #Medicare #ValueBasedCare #HealthcareFinance #DOJ #KaiserPermanente
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Sources:
DOJ settlement and whistleblower allegations: STAT News, U.S. News & World Report, January 15, 2026
Kaiser MA enrollment (1.9M): Kaiser Permanente
MA revenue estimate (~$25-28B): Author calculation based on CMS benchmark rates
Physician pressure and tracking allegations: DOJ complaint, consolidated whistleblower lawsuits
Originally published by Bhargav Raman, MD
Cofounder, Clinical Strategy and Analytics
https://www.linkedin.com/posts/universalistmd_kaiser-permanente-affiliates-pay-556m-to-activity-7417936187790839808-gKzy/
