One of the largest providers of health care services in The Villages settled with the federal government for more than half a billion dollars to resolve accusations that the company filed false Medicare diagnosis codes in order to increase payments.
The U.S. Justice Department announced Thursday that The Villages Health System agreed to a $541.5 million settlement.
The settlement is the culmination of a federal investigation that began in December of 2024 when The Villages Health announced it had self-reported the Medicare billing issue.
The Villages Health System reported that it submitted false diagnosis codes, increasing payments from the Medicare Advantage program, a violation of the False Claims Act.
“The diagnosis codes were invalid because they did not have adequate support in the patient’s medical record or were based on amendments to the medical record that were not initiated by the rendering provider and were not timely or were not approved by the rendering provider,” the Justice Department said in a news release.
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The company and the Justice Department initially said The Villages Health System owed at least $361 million in overpayments.
The federal government was the largest creditor listed by The Villages Health System when the company filed for Chapter 11 bankruptcy in July 2025.
The company was subsequently bought by CenterWell, a senior health care provider owned by Humana.
At one point during the bankruptcy proceedings, Justice Department officials objected to the language for the sale because they were concerned that it shielded an “overly broad” list of parties from potential civil or criminal liability.
In the news release, the Justice Department did not announce whether there would be any criminal liability in the case. It also made sure to acknowledge that The Villages Health System cooperated with the government throughout the investigation.
The bankruptcy court approved the settlement this week.
The Villages Health System serves 55,000 patients in the vast retirement community. It was originally founded by the developers to provide holistic care, with an emphasis on team care for patients.