The biggest False Claims Act news of the week was the Eleventh Circuit's decision in United States ex rel. Zafirov v. Florida Med. Assocs., LLC, No. 24-13581 (11th Cir. Sept. 1, 2026). Plenty has already been written about it, so we will keep our observations short.
The court decided one narrow question. An FCA relator is not an officer of the United States because a relator does not occupy a “continuing position established by law.” On that issue, the Eleventh Circuit joined the Fifth, Sixth, Ninth, and Tenth Circuits. But the court deliberately left the rest for another day.
It did not decide whether relators exercise “significant authority,” and it assumed without deciding that the Supreme Court's officer test even applies to private relators. Most important, it remanded the defendants' Take Care Clause and Vesting Clause challenges for the district court to decide in the first instance.
So Zafirov did not end the constitutional debate over qui tam litigation. The Third Circuit is considering similar Article II arguments in United States ex rel. Penelow v. Janssen Products, L.P., No. 25-1818, and two Fifth Circuit judges have urged their court to reconsider its en banc decision in Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001).
For defendants in declined cases, the constitutional arguments remain worth preserving. That is enough on Zafirov.
A $541.5 million lesson in Medicare Advantage coding
The more practical development came from our own backyard.
On August 26, the Justice Department announced a $541.5 million settlement with The Villages Health System, LLC, resolving allegations that the physician group submitted unsupported diagnosis codes to Medicare Advantage insurers from 2020 through 2024. TVH had disclosed the problem itself through HHS-OIG's Health Care Fraud Self-Disclosure Protocol.
To understand the case, it helps to understand how Medicare Advantage pays.
CMS pays private Medicare Advantage plans a monthly amount for each enrolled beneficiary. That amount changes with the patient's expected healthcare needs. Put simply, a patient with documented serious illnesses generally produces a higher payment than a healthier patient.
Providers send diagnosis codes to the plans; the plans send the relevant data to CMS; and those diagnoses can affect the plan's payment. The system therefore depends heavily on the medical record supporting the diagnosis that generates the higher risk score.
According to TVH's settlement agreement, outside consultants had told the group that it was “undercoding.” Beginning in 2020, TVH employees conducted retrospective chart reviews and proposed diagnoses that had not been recorded at the original visit.
In some instances, the changes came months or more than a year later. Employees sometimes added not only a diagnosis but also language describing the monitoring, evaluation, assessment, or treatment of the condition. Rendering or reviewing providers reviewed the proposed changes before they became part of the record.
TVH's later reviews concluded that substantial numbers of the added diagnoses lacked sufficient support. Its consultant estimated that the unsupported codes generated about $416 million in additional CMS payments to the Medicare Advantage plans, of which about $361 million flowed to TVH.
The $541.5 million settlement figure is exactly 1.5 times that $361 million estimate. That is consistent with HHS-OIG's stated practice of seeking at least 1.5 times single damages in Self-Disclosure Protocol resolutions. The settlement also expressly gives TVH credit for disclosure, cooperation, and remediation.
The provider was not the end of the government's recovery
There is another reason this settlement deserves attention: TVH was already in Chapter 11.
Its bankruptcy did not make the overpayments disappear. Instead, CMS also looked to the Medicare Advantage organizations that had received the increased payments generated by TVH's diagnosis codes. DOJ's announcement says the plans are returning overpayments through code deletions, agreements with the government, or both.
UnitedHealthcare agreed to pay about $125.5 million. Florida Blue received credit for roughly $9.2 million attributable to codes it had already deleted or included in estimates submitted to CMS, and agreed to pay another $11.95 million.
The agreements are especially revealing because the government expressly took the position that the plans' CMS contracts required repayment of amounts attributable to TVH's invalid diagnoses, including amounts CMS might be unable to recover from TVH because of its bankruptcy.
That position fits the regulatory structure. A Medicare Advantage organization retains “ultimate responsibility” for complying with its CMS contract despite arrangements with downstream entities. 42 C.F.R. § 422.504(i) (2026).
Its CEO, CFO, or authorized delegate must also certify the accuracy, completeness, and truthfulness of data used to determine payment. Id. § 422.504(l) (2026). And the federal overpayment statute expressly includes Medicare Advantage organizations among the entities required to report and return identified overpayments. 42 U.S.C. § 1320a-7k(d) (2018).
The practical lesson
Self-disclosure also mattered here, but it was no cure-all. TVH received express credit for disclosure, cooperation, and remediation. Yet the underlying single-damages estimate was still $361 million, and the company filed for bankruptcy before the matter was resolved.
The practical lesson is that voluntary disclosure can materially affect the resolution of an FCA matter without making the underlying economic problem disappear.
The bottom line
Zafirov will receive more attention because it raises a fundamental constitutional question about the False Claims Act. It should.
But The Villages settlement may offer the more immediate lesson for the healthcare industry. Medicare Advantage risk adjustment creates a chain: provider diagnoses affect plan submissions, plan submissions affect CMS payments, and unsupported diagnoses can create exposure for more than one link in that chain.
