The Cigna Group, a major health insurance provider, has agreed to a significant settlement of $172,294,350 to resolve allegations of False Claims Act violations. The core of the issue revolves around the submission of inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees. This action allegedly aimed to inflate payments received from Medicare, raising concerns about ethical practices within the Medicare Advantage program.
Understanding the Medicare Advantage Diagnosis Code Fraud
Medicare Advantage (MA), also known as Medicare Part C, is a program that allows Medicare beneficiaries to receive their health benefits through private insurance plans. These MA Plans are paid a fixed monthly sum by the Centers for Medicare and Medicaid Services (CMS) for each enrolled beneficiary. To ensure fair compensation, CMS adjusts these payments based on “risk factors,” using medical diagnosis codes to predict healthcare costs. Plans treating sicker patients, indicated by more complex diagnosis codes, receive higher payments, while plans covering healthier individuals receive less. This system, known as risk adjustment, is crucial for equitable distribution of Medicare funds.
Cigna, operating numerous MA Organizations across the US, was accused of exploiting this risk adjustment system. The United States government alleged that Cigna intentionally submitted inaccurate patient diagnosis data to CMS. This manipulation was designed to inflate their risk scores and, consequently, the payments they received from CMS. Furthermore, Cigna allegedly failed to correct or withdraw these inaccurate diagnosis codes and falsely certified the data’s accuracy to CMS. The recent settlement directly addresses these serious allegations.
“With over half of Medicare beneficiaries now in Medicare Advantage plans and the government allocating over $450 billion annually for their care, ensuring the integrity of these plans is paramount,” stated Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “This settlement underscores our commitment to holding Medicare Advantage insurers accountable when they knowingly pursue inflated payments through manipulation of beneficiary diagnoses or other fraudulent practices.”
How Cigna’s Scheme Used Inaccurate Diagnosis Codes to Inflate Payments
The government’s investigation revealed several key methods employed by Cigna to submit these inaccurate diagnosis codes, all aimed at maximizing their Medicare payments.
Chart Reviews: A System Biased Towards Inflated Risk Scores
For payment years 2014 to 2019, Cigna implemented a “chart review” program. This involved retrieving medical records, or “charts,” from healthcare providers detailing services provided to Cigna’s Medicare Advantage enrollees. Cigna then hired diagnosis coders to scrutinize these charts, tasked with identifying and assigning diagnosis codes for every medical condition they could find documented. The results of these chart reviews were used to submit additional diagnosis codes to CMS, codes that the original healthcare providers had not initially reported. This practice, in itself, is not inherently fraudulent. However, the issue arose in how Cigna handled discrepancies.
While Cigna used chart reviews to add diagnosis codes and increase risk scores, the same reviews also uncovered instances where diagnosis codes previously submitted by Cigna, based on provider reports, were not substantiated by the medical records. Crucially, Cigna allegedly chose to ignore this negative information. Instead of deleting or withdrawing these inaccurate and untruthful diagnosis codes, which would have required them to reimburse CMS for overpayments, Cigna maintained the inflated risk scores. The government argued that this selective use of chart review results demonstrated a deliberate strategy to maximize payments, only leveraging chart reviews to increase revenue while disregarding findings that would decrease it.
“The growth of Medicare Advantage plans necessitates rigorous oversight to combat fraud within Medicare Part C. Our office is dedicated to tackling Medicare Advantage fraud, employing data-driven investigative techniques and collaborating closely with law enforcement partners nationwide,” emphasized U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania. “We are committed to holding accountable those who inflate Medicare Advantage payments by reporting unsupported diagnoses, including conditions like morbid obesity.”
Home Visit Assessments: Superficial Evaluations for Serious Diagnoses
Another concerning practice involved Cigna’s use of in-home assessments. Cigna contracted with vendors to conduct home visits of plan members, often performed by nurse practitioners. The government alleged that diagnoses reported to CMS were frequently based solely on forms completed during these brief home visits. Critically, these healthcare providers conducting home visits did not perform or order the necessary diagnostic testing or imaging required to reliably diagnose the serious and complex conditions they reported. In many cases, they were even prohibited by Cigna from providing any treatment during these visits, raising serious questions about the legitimacy and purpose of these assessments.
The diagnoses generated from these home visits often lacked supporting evidence in the vendor-completed forms and were not corroborated by any other healthcare provider who treated the patient during the year. Despite this lack of robust medical basis, Cigna submitted these diagnoses to CMS, falsely certifying the data as “accurate, complete, and truthful” each year to secure increased payments. This practice suggests a systematic effort to generate diagnoses for the sole purpose of financial gain, irrespective of actual patient health status.
“For years, Cigna knowingly submitted false and invalid diagnosis information for its Medicare Advantage plan members, using cursory in-home assessments to report serious and complex conditions without proper diagnostic support,” stated Damian Williams, United States Attorney for the Southern District of New York. “Cigna was aware that these diagnoses would artificially inflate their Medicare Advantage payments by making their plan members appear sicker than they were. Our office is dedicated to ensuring insurers are held responsible if they manipulate the Medicare Advantage Program and boost profits by submitting false information to the Government.”
Morbid Obesity Diagnosis Codes: Inflating Payments Without BMI Confirmation
Further allegations focused on Cigna’s handling of morbid obesity diagnosis codes. From 2016 to 2021, Cigna allegedly knowingly submitted and/or failed to remove inaccurate diagnosis codes for morbid obesity. A diagnosis of morbid obesity typically requires documented Body Mass Index (BMI) recordings. Specifically, a BMI of 35 or above is a common criterion. However, the government alleged that Cigna submitted or maintained morbid obesity diagnosis codes for individuals without a BMI of 35 or higher. These unsupported diagnoses directly increased CMS payments to Cigna, further demonstrating a pattern of prioritizing financial gain over data accuracy.
“The Medicare Advantage program depends on the integrity of its insurers and the accuracy of the diagnosis code information they provide, as this data significantly impacts Medicare payments,” said Henry C. Leventis, United States Attorney for the Middle District of Tennessee. “We are committed to aggressively pursuing fraud in this increasingly vital program.”
Consequences for Cigna: Settlement and Corporate Integrity Agreement
In addition to the substantial financial 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). This CIA mandates significant changes to Cigna’s compliance and auditing practices. Key components of the CIA include annual certifications by top executives and board members regarding Cigna’s compliance measures, annual risk assessments and enhanced monitoring, and independent audits focused specifically on risk adjustment data. These measures aim to prevent future fraudulent activities and ensure greater accountability within Cigna’s Medicare Advantage operations.
“Medicare Advantage plans that submit false information to inflate payments from CMS demonstrate a blatant disregard for the integrity of vital federal healthcare funds,” stated Christian J. Schrank, Deputy Inspector General for Investigations with HHS-OIG. “Such actions are a disservice to the Medicare program and the millions of patients who depend on its services. Working with our law enforcement partners, our agency will continue to prioritize investigating alleged fraud targeting the Medicare Advantage program.”
Whistleblower Contribution and Reporting Medicare Fraud
The settlement also includes a resolution of claims brought under the qui tam provisions of the False Claims Act by Robert A. Cutler, a former part-owner of a vendor contracted by Cigna for home visits. Under these provisions, whistleblowers can file lawsuits on behalf of the government and receive a portion of any recovered funds. Mr. Cutler will receive $8,140,000 from the settlement related to the home visit allegations, highlighting the crucial role of whistleblowers in uncovering healthcare fraud.
The Justice Department emphasizes that combating healthcare fraud remains a top priority. The False Claims Act is a powerful tool in this fight. Individuals with information about potential fraud, waste, abuse, or mismanagement within Medicare or other government programs are encouraged to report it to the Department of Health and Human Services at www.oig.hhs.gov/fraud/report-fraud/ or by calling 800-HHS-TIPS (800-447-8477).
This case was a collaborative effort between multiple government agencies, including the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and various U.S. Attorneys’ Offices, with assistance from HHS-OIG.
It is important to note that the claims resolved by this settlement are allegations only, and there has been no determination of liability.
