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 allegations they violated the False Claims Act by causing the submission of false or invalid diagnosis codes to the Medicare Advantage program.

Matrix will pay 36.5 million dollars, HealthFair will pay 5 million dollars and Shahriah “James” Ekbatani will pay 15 million dollars. The payments resolve two separate qui tam lawsuits, one filed in the Southern District of New York and the other in the Eastern District of Texas. HealthFair was acquired by Matrix after the conduct at issue.

The companies and Ekbatani neither admitted nor denied the government's allegations in the settlements announced June 3, 2026. Medicare Advantage plans receive monthly capitated payments from the Centers for Medicare and Medicaid Services that are risk-adjusted based on enrollees' documented diagnoses.

Invalid diagnosis codes can therefore produce inflated payments that the government would not otherwise have made.

The resolution ends the government's pursuit of False Claims Act liability against the three parties for the conduct described in the two whistleblower suits. Matrix must now remit its 36.5 million dollar payment, HealthFair its 5 million dollar payment and Ekbatani his 15 million dollar payment to the United States.

No further litigation on these specific allegations will proceed in either district court.

Downstream, the Department of Justice has recovered funds tied to allegedly improper risk-adjustment payments in the Medicare Advantage program, which now serves more than 30 million beneficiaries. The settlement concludes two qui tam actions and returns money to the federal treasury without requiring trial on the validity of the submitted diagnosis codes.

Other Medicare Advantage contractors remain subject to the same risk-adjustment rules and False Claims Act exposure for coding practices.

This settlement is the latest False Claims Act recovery involving Medicare Advantage risk-adjustment coding. The Department of Justice has pursued similar allegations against multiple health insurers and diagnostic companies in recent years under both the Trump and Biden administrations.