- Cigna has agreed to pay $172 million to settle allegations that the payer submitted false diagnosis codes for its Medicare Advantage enrollees to increase its reimbursement from the government, the Department of Justice announced Saturday.
- The agreement settles a whistleblower lawsuit against Cigna that the DOJ joined last year, after previously declining to intervene in the case.
- As part of the settlement, Cigna has agreed to a five-year oversight plan with the HHS Office of Inspector General requiring the Connecticut-based insurer to implement a number of accountability and auditing provisions, including an annual independent review of its risk adjustment data.
MA plans have been growing in popularity among America’s seniors, and are expected to cover a record 33.8 million people in 2024.
But, as the program has grown, so too have concerns about fraud and abuse in the program, as health insurers that contract with the government to cover beneficiaries’ care are incentivized to inflate member sickness to get more money from Medicare.
The lawsuit against Cigna was first filed in 2017, and the DOJ joined in late 2022.
According to the suit, the insurer operated a “chart review” program from 2014 and 2019 that allowed it to retrieve medical records from providers and assign beneficiaries additional and unsubstantiated diagnosis codes for their medical conditions, the DOJ said.
Cigna also allegedly reported codes to the CMS based on in-home member assessments that were not supported by diagnostic testing or imaging. For the assessments, vendors — typically nurse practitioners — enter members homes to flag conditions for the payer that Cigna used to claim higher payments from the CMS, without backing up those diagnoses, the DOJ said.
Cigna also submitted inaccurate diagnosis codes for morbid obesity from 2016 to 2021, the suit said.
The practices allowed the payer to bilk “tens of millions of dollars” from the government, according to the DOJ.
Whistleblower Robert Cutler, the former owner of a business that conducted home visits for Cigna, will receive $8.1 million from the settlement.
The settlement did not require Cigna to admit liability.
"These agreements fully resolve long-running legal matters, enabling us to focus our resources on all those we serve and avoiding the uncertainty and further expense of protracted litigation," Chris DeRosa, president of Cigna Healthcare's U.S. government business, said in a statement on the payer’s website.
The federal government has been increasingly active in cracking down on insurers exaggerating the conditions of their MA enrollees to receive higher reimbursements. A number of healthcare organizations have been sued or shelled out fines over allegations of MA fraud and abuse over the past few years, including Sutter Health, Kaiser Permanente and Elevance.
Overpayments to MA plans could reach more than $75 billion this year, due in part to aggressive coding, according to the USC Schaeffer Center for Health Policy and Economics. The CMS is retroactively auditing to claw back past overpayments, though Humana is suing regulators to halt the plan.