Matrix Medical Network HealthFair and Founder Pay 56.5 Million to Resolve False Claims Act Allegations

Matrix Medical Network, HealthFair and its founder agreed to pay 56.5 million dollars to resolve False Claims Act allegations that they caused the submission of false or invalid diagnosis codes to the Medicare Advantage program, the Justice Department announced on June 3, 2026.

Community Care Health Network LLC, doing business as Matrix Medical Network, will pay 36.5 million dollars to resolve claims brought in a qui tam action filed in the Southern District of New York. DPN USA, doing business as HealthFair, which Matrix acquired, will pay 5 million dollars.

Founder Shahriah “James” Ekbatani will pay 15 million dollars to resolve claims in a separate qui tam action filed in the Eastern District of Texas. The settlements cover allegations that the companies and Ekbatani submitted or caused the submission of unsupported diagnosis codes that inflated risk-adjustment payments from Medicare Advantage plans.

Medicare Advantage uses risk-adjustment diagnoses submitted by providers and vendors to determine monthly capitated payments to private insurers. The prior state allowed Matrix and HealthFair to conduct in-home assessments and submit codes that the government later deemed unsupported.

Under the settlements, the parties make immediate payments with no admission of liability and the claims are resolved.

The 56.5 million dollars in recoveries returns funds to the Medicare Trust Fund. The settlements conclude two whistleblower suits and remove the defendants from further liability on the covered conduct. Federal prosecutors in the Southern District of New York and Eastern District of Texas must now close the respective dockets.

The resolution is part of the Justice Department's ongoing enforcement against improper risk-adjustment practices in Medicare Advantage, which accounted for more than half of all Medicare beneficiaries in 2025.

This is the latest in a series of False Claims Act settlements targeting diagnosis-code practices used to increase Medicare Advantage payments. The Justice Department has pursued similar allegations against other Medicare Advantage vendors and health systems in recent years.