The Justice Department alleges Cigna made it appear its Medicare Advantage (MA) members were sicker than they were to inflate its Medicare payments.
The Department of Justice announced Saturday it reached a multi-million settlement with Cigna to resolve allegations that the MA insurer violated the False Claims Act by submitting and failing to withdraw inaccurate diagnosis codes for its MA plan enrollees. Cigna has agreed to pay $172,294,350 to settle the charges.
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The federal government claims that Cigna submitted inaccurate diagnosis data to the Centers for Medicare & Medicaid Services (CMS) to increase its Medicare payments, failed to withdraw the inaccurate diagnosis data and replay CMS, and falsely certified in writing to CMS that the data was accurate and truthful, which date back to 2014.
CMS pays MA plans a fixed monthly amount for each beneficiary enrolled but adjusts payments to account for risk factors to ensure that plans are paid more for enrollees expected to incur higher health care costs and less to plans who enroll healthier beneficiaries and incur lower costs. To make the adjustments, CMS collects risk adjustment data, including medical diagnosis codes from MA plans.
According to the DOJ, Cigna allegedly:
Used chart reviews for payment years 2014 to 2019 to submit additional diagnosis codes to CMS that the health care providers had not reported for the beneficiaries to obtain additional payments from CMS.
However, the chart reviews also did not substantiate some diagnosis codes that were reported by providers and previously submitted by Cigna to CMS. Cigna did not delete or withdraw these inaccurate and untruthful diagnosis codes, however, which would have required the insurer to reimburse CMS.
Reported diagnosis codes to CMS that were based solely on forms completed by vendors retained and paid by Cigna to conduct in-home assessments of plan members. The health care providers (typically nurse practitioners) who conducted these home visits did not perform or order the diagnostic testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions reported, and were in many cases prohibited by Cigna from providing any treatment during the home visits for the medical conditions they purportedly found. The diagnoses were not supported by the information documented on the forms completed by the vendors and were not reported to Cigna by any other health care provider who saw the patient during the year in which the home visit occurred. Cigna submitted these diagnoses to CMS to claim increased payments and falsely certified each year that the diagnosis data it submitted was “accurate, complete, and truthful.”
“For years, Cigna submitted to the government false and invalid diagnosis information for its Medicare Advantage plan members. The reported diagnoses of serious and complex conditions were based solely on cursory in-home assessments by providers who did not perform necessary diagnostic testing and imaging. Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker,” said Damian Williams, United States attorney for the Southern District of New York, in the announcement. “This Office is committed to holding insurers accountable if they seek to manipulate the Medicare Advantage Program and boost their profits by submitting false information to the Government.”
Knowingly submitted and/or failed to delete or withdraw inaccurate and untruthful diagnosis codes for morbid obesity to increase the payments it received from CMS for numerous beneficiaries enrolled in its MA plans. DOJ alleges these actions took place for payment years 2016 to 2021.
The medical records for individuals diagnosed as morbidly obese typically include one or more Body Mass Index (BMI) recordings. Individuals with a BMI below 35 cannot properly be diagnosed as morbidly obese. However, Cigna submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity for individuals lacking a BMI of 35 or above, and these codes increased the payments made by CMS.
In connection with the settlement, Cigna has entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Cigna implement numerous accountability and auditing provisions. Cigna must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits focused on risk adjustment data.
“Medicare Advantage plans that submit false information to increase payments from CMS show blatant disregard for the integrity of these vital federal health care funds,” stated Christian J. Schrank, deputy inspector general for Investigations with HHS-OIG,” said in the announcement. “Such actions are an affront to the Medicare program and the millions of patients who rely on its services. Working with our law enforcement partners, our agency will continue to prioritize investigating alleged fraud that targets the Medicare Advantage program.”
The civil settlement of the home visit allegations includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Robert A. Cutler, a former part-owner of a vendor retained by Cigna to conduct home visits. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of the resolution, Cutler will receive $8.1 million from the settlement of the home visit allegations.