Cigna to pay $172M to settle claims of wrongful reimbursement by Medicare Advantage

© Aerial Mike - sotck.adobe.com

Health insurance giant The Cigna Group will pay more than $172.29 million to resolve claims it used bogus diagnosis codes to increase payments from Medicare, according to the U.S. Department of Justice (DOJ).

Cigna operates Medicare Advantage (MA) health insurance plans to beneficiaries across the country. The U.S. Centers for Medicare & Medicaid Services (CMS) pays Cigna’s and other health insurers’ MA plans a fixed monthly amount per beneficiary, adjusting those amounts based on risk adjustment data that includes medical diagnosis codes, according to DOJ.

Federal investigators “alleged that Cigna submitted inaccurate and untruthful patient diagnosis data to CMS in order to inflate the payments it received from CMS, failed to withdraw the inaccurate and untruthful diagnosis data and repay CMS, and falsely certified in writing to CMS that the data was accurate and truthful.” The settlement resolved those allegations.

“Over half of our nation’s Medicare beneficiaries are now enrolled in Medicare Advantage plans, and the government pays private insurers over $450 billion each year to provide for their care,” Deputy Assistant Attorney General Michael D. Granston said in a DOJ news release. Granston works in the Justice Department's Civil Division.

“We will hold accountable those insurers who knowingly seek inflated Medicare payments by manipulating beneficiary diagnoses or any other applicable requirements,” Granston said.

From 2014 to 2019, Cigna operated a “chart review” program that obtained beneficiary charts from physicians and other medical providers. Using diagnosis coders, Cigna identified medical conditions supported by the charts, then submitted additional diagnosis codes to CMS for payment, according to DOJ.

Cigna also did not delete or withdraw “inaccurate and untruthful” diagnosis codes that were reported by providers and previously submitted to CMS for payment. That would have required Cigna to reimburse CMS, according to DOJ.

In other instances, Cigna submitted diagnosis codes for payment by CMS, that were not supported by data from vendors conducting in-home assessments of beneficiaries. The in-home clinicians, typically nurse practitioners, did not perform or order the diagnostic testing or imaging needed to support the diagnoses. In many cases, Cigna prohibited them from providing treatment for medical conditions they purportedly found, according to DOJ.

From 2016 to 2021, Cigna also submitted phony claims of morbid obesity, or failed to delete them, for beneficiaries lacking a body mass index of 35, the threshold for that diagnosis, according to DOJ.

Cigna will have a five-year corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). The insurer will have “numerous accountability and auditing provisions” with executive certifications and additional monitoring, according to DOJ.

Some of the claims date “back more than a decade,” and since then, Cigna Healthcare’s Medicare business has completed a successful program audit by CMS, “with strong results,” the company said in a statement.

"We hold ourselves to high standards for serving Medicare beneficiaries and all of our customers, and are constantly evaluating and evolving our processes accordingly," Chris DeRosa, president of Cigna Healthcare's U.S. government business, said in the statement. "This resolution provides us another important tool to gain insights and further improve our support for beneficiaries and we look forward to continuing our collaborative and constructive relationship with the government. Above all, our focus remains on improving the health and vitality of all those we serve."

The civil case involving the home visit allegations involves “qui tam” or whistleblower provisions of the federal False Claims Act. Those were brought by Robert A. Cutler, a former part owner of a vendor Cigna retained for home visits with patients, according to DOJ.

After filing the action on behalf of the United States, Cutler is entitled to receive portion of the recovery – in this case, $8.14 million from the settlement of the home visit allegations.

For the second quarter of 2023, Cigna Group reported total revenues of $48.6 billion, according to the company. As of August, industry watcher HealthPayerIntelligence ranked Cigna the fifth-largest health insurance company in the United States.