The Justice Department has filed a civil health care fraud lawsuit against Cigna, claiming that the insurer hired vendors to conduct in-home assessments of its Medicare Advantage (MA) members and falsely document medical conditions.

The United States Attorney’s Office for the Southern District of New York has filed a lawsuit against Cigna and is seeking damages and penalties under the False Claims Act for submitting false and invalid patient diagnosis codes to artificially inflate the risk adjustment payments Cigna received for providing insurance coverage to its MA members. 

The Department of Justice previously announced it was intervening in a whistleblower lawsuit that Cigna was making it appear that their MA members were sicker than they actually were in order to receive higher federal payments.

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The complaint, filed in the United States District Court for the Middle District of Tennessee Nashville division, alleges that from 2012 to 2019, Cigna reported diagnoses codes based solely on forms filled out by vendors that the insurer had hired to perform limited in-home assessments of plan members. The contracted health care professionals didn't conduct or order testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions they reported.

In addition, Cigna prohibited the contracted professionals from providing any treatment during the home visit for the medical conditions they found. The government says there was no supporting documentation for the diagnoses and no other health care provider who saw the patient during the year in which the home visit occurred reported similar diagnoses. However, Cigna submitted the diagnoses to the Centers for Medicare & Medicaid Services (CMS) to claim increased payments and falsely certified on an annual basis that its diagnosis data submissions were accurate, complete, and truthful.

The invalid diagnoses included complex medical conditions such as chronic kidney disease, congestive heart failure, rheumatoid arthritis, and diabetes with renal complications.

“As alleged, Cigna obtained tens of millions of dollars in Medicare funding by submitting to the government false and invalid diagnoses for its Medicare Advantage plan members. Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker,” said Damian Williams, the United States Attorney for the Southern District of New York, in an announcement about the case. “This Office is dedicated to holding insurers accountable if they seek to manipulate the system and boost their profits by submitting false information to the government.”

The MA payment model is designed to pay more to organizations that provide care to sicker enrollees because they are expected to incur higher costs and less to organizations that care for healthier enrollees, who incur lower costs.

The lawsuit alleges that Cigna contracted with several vendors to conduct home visits of MA plan members across the country as part of its “360 comprehensive assessment program.” Based on the visit, vendors would complete a Cigna created form that include a check-the-box multipage list of a wide range of medical conditions. The insurer then had its coding teams identify diagnosis codes that corresponded to the recorded medical conditions and then submitted those to CMS for risk adjustment payment purposes.

The complaint states that Cigna structured the home visits for the primary purpose of capturing and recording diagnosis codes that would significantly increase the monthly capitated payments it received from CMS. The purpose of the visits wasn’t to treat the patients’ medical conditions, and Cigna prohibited the contracted health care providers from providing actual treatment or care. Although Cigna acknowledged this in an internal document about the program, it didn’t disclose the information to Cigna plan members when they scheduled the home visit or during the actual visit. In addition, the DOJ alleges that when Cigna identified plan members to receive home visits, the insurer targeted individuals who were likely to yield the greatest risk score increases and an increased payment.

The contracted health care professionals spent limited time with patients and didn’t conduct physical examinations. The assessments were based on the patients’ own self-assessments and their responses to basic screening questions. The contractors also didn’t have access to patients’ full medical histories and didn’t obtain or review relevant records from their primary care physicians in advance of the visit.

According to the complaint, Cigna put pressure on the contractors to record diagnoses that significantly increased risk adjustment payments. Indeed, managers identified at least 12 classes of generic chronic diagnoses that they thought were “often underdiagnosed” among its plan members and, through trainings and seminars, encouraged the vendor health care professional to make these diagnoses during the home visits. Cigna also closely tracked the volume and nature of the diagnoses generated by each vendor’s home visits, as well as how the diagnoses affected risk-adjusted payments. The insurer provided trainings to vendors to improve their “performance” when they failed to deliver the expected level of high-value diagnosis codes.

The government alleges that Cigna even tracked the return on investment (ROI) of the 360-home visit program by comparing the costs of the in-home visits against the additional Part C payments generated by increased risk scores. For example, according to an internal report, Cigna determined that, during the first nine months of 2014, one vendor’s 6,658 in-home visits resulted in more than an additional $14 million in Medicare payments, which dwarfed the approximately $2.13 million that Cigna paid to the vendor. Another report indicated Cigna spent nearly $19 million on home visits and projected a profit of approximately $62 million in 2014. But when calculating the costs for ROI, Cigna included only the payments to vendors for conducting the in-home visits but didn’t count the costs that would be incurred for treating the medical conditions that the patients had.