In a significant legal development, The Cigna Group, a major healthcare organization headquartered in Connecticut, has agreed to a settlement of $172,294,350. This resolution addresses allegations that Cigna violated the False Claims Act by knowingly submitting and neglecting to retract inaccurate and untruthful Diagnosis Codes For My Christian Care and other enrollees in its Medicare Advantage Plan. The aim of this alleged misconduct was to illicitly inflate payments received from Medicare.
The Medicare Advantage (MA) Program, also known as Medicare Part C, allows Medicare beneficiaries to opt for healthcare coverage through private insurance plans, termed MA Plans. The Centers for Medicare and Medicaid Services (CMS) compensates these MA Plans with a fixed monthly sum for each enrolled beneficiary. To ensure fair allocation of funds, CMS adjusts these monthly payments based on various “risk” factors that influence anticipated healthcare expenditures for each beneficiary. This risk adjustment mechanism is designed to pay MA Plans more for beneficiaries expected to require more healthcare services and less for healthier individuals. CMS relies on “risk adjustment” data, including medical diagnosis codes, submitted by the MA Plans to make these crucial adjustments.
Cigna, a prominent player in the healthcare sector, operates MA Organizations that offer MA Plans to beneficiaries nationwide. The core allegation against Cigna is that the company deliberately submitted flawed and false patient diagnosis codes data to CMS. This was purportedly done to artificially inflate the payments Cigna received from CMS. Furthermore, it is alleged that Cigna failed to withdraw these inaccurate and untruthful diagnosis codes and consequently neglected to reimburse CMS for the overpayments. Adding to the severity of the accusations, Cigna allegedly provided false written certifications to CMS, affirming the accuracy and truthfulness of the submitted data. The settlement announced today brings closure to these serious allegations.
“With over half of our nation’s Medicare beneficiaries now enrolled in Medicare Advantage plans, and the government allocating over $450 billion annually to private insurers for their care, the integrity of these programs is paramount,” stated Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “We are steadfast in our commitment to hold accountable those insurers who intentionally seek inflated Medicare payments through manipulation of beneficiary diagnoses or any other breaches of applicable regulations.”
The government’s case against Cigna detailed a “chart review” program operational from 2014 to 2019. Under this program, Cigna purportedly obtained medical records, or “charts,” from healthcare providers. These records documented services previously provided to Medicare beneficiaries enrolled in Cigna’s plans. Cigna then employed diagnosis coders to scrutinize these charts, tasked with identifying all medical conditions supported by the documentation and assigning corresponding diagnosis codes for these conditions. Cigna utilized the findings of these chart reviews to submit additional diagnosis codes to CMS, codes that the healthcare providers had not initially reported for the beneficiaries. This practice was allegedly aimed at securing increased payments from CMS.
However, the government contends that Cigna’s chart reviews also uncovered instances where diagnosis codes initially reported by providers and previously submitted by Cigna to CMS were not substantiated. Despite identifying these inaccuracies, Cigna allegedly failed to delete or withdraw these inaccurate and untruthful diagnosis codes. Such withdrawal would have mandated Cigna to refund CMS for overpayments. The allegations suggest a double standard: Cigna allegedly exploited the chart review results to identify opportunities for increased payments from CMS but strategically ignored the same results when they revealed instances of overpayment to Cigna.
“The expansion of Medicare Advantage plans underscores the critical importance of rigorously investigating fraud within Medicare Part C. Combating Medicare Advantage fraud is a top priority for my office, and we are committed to employing data-driven investigative methods and collaborating closely with our law enforcement partners nationwide,” emphasized U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania. “We are dedicated to holding accountable those who report unsupported diagnoses to inflate Medicare Advantage payments, including, for example, unsupported diagnosis codes for conditions like morbid obesity.”
Further accusations against Cigna involve the submission of diagnosis codes to CMS that were purportedly based solely on forms completed by vendors contracted and paid by Cigna. These vendors conducted in-home assessments of plan members. The healthcare providers, often nurse practitioners, performing these home visits allegedly did not conduct or order the necessary diagnostic testing or imaging required to reliably diagnose the serious and complex conditions reported. In many instances, these providers were allegedly prohibited by Cigna from administering any treatment during these home visits for the medical conditions they purportedly identified. The government argues that the diagnosis codes in question lacked sufficient support from the documentation on the vendor-completed forms and were not corroborated by any other healthcare provider who examined the patient during the year of the home visit. Despite these shortcomings, Cigna allegedly submitted these diagnosis codes to CMS to claim inflated payments and annually falsely certified that the submitted diagnosis data was “accurate, complete, and truthful.”
“For an extended period, Cigna allegedly submitted false and invalid diagnosis information for its Medicare Advantage plan members. The reported diagnoses of serious and complex conditions were purportedly based solely on superficial in-home assessments by providers who did not perform essential diagnostic evaluations. Cigna was acutely aware that these diagnosis codes would inflate its Medicare Advantage payments by falsely portraying its plan members as sicker than they were,” stated Damian Williams, United States Attorney for the Southern District of New York. “Our office is resolute in holding insurers accountable if they attempt to manipulate the Medicare Advantage Program and boost their profits by submitting false information to the government.”
“The Medicare Advantage program’s effectiveness hinges on the integrity of its insurers and the accuracy of the diagnosis code information they provide, as this data significantly impacts Medicare payments,” remarked Henry C. Leventis, United States Attorney for the Middle District of Tennessee. “We will aggressively pursue fraud in this increasingly vital program.”
The United States further alleged that, from 2016 to 2021, Cigna knowingly submitted and/or failed to remove inaccurate and untruthful diagnosis codes related to morbid obesity. This was allegedly done to increase payments from CMS for numerous beneficiaries enrolled in its MA plans. Accurate diagnosis codes for morbid obesity typically require Body Mass Index (BMI) recordings in medical records. A BMI below 35 is generally not indicative of morbid obesity. However, Cigna allegedly submitted or failed to correct inaccurate and untruthful diagnosis codes for morbid obesity for individuals with BMIs below this threshold. These erroneous codes resulted in inflated payments from CMS.
In conjunction 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). This CIA mandates that Cigna implement extensive accountability and auditing measures. Annually, top executives and members of the Board of Directors must certify Cigna’s compliance measures. Cigna is also required to conduct annual risk assessments and other monitoring activities. Furthermore, an independent review organization will perform comprehensive audits focused on risk adjustment data.
“Medicare Advantage plans that submit false information to inflate payments from CMS demonstrate a blatant disregard for the integrity of essential federal health care funds,” asserted Christian J. Schrank, Deputy Inspector General for Investigations with HHS-OIG. “Such actions are an affront 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.”
The civil settlement pertaining to the home visit allegations includes the 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 to conduct home visits. These provisions allow private individuals to file actions on behalf of the United States and receive a portion of any recovered funds. The qui tam case is titled United States ex rel. Cutler v. Cigna Corp., et al., No. 3:21-cv-00748 (M.D. Tenn.). As part of this resolution, Mr. Cutler will receive $8,140,000 from the settlement related to the home visit allegations.
The resolution in this matter is the result of a collaborative effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorneys’ Offices for the Eastern District of Pennsylvania, the Southern District of New York, and the Middle District of Tennessee, with support from HHS-OIG.
This investigation and resolution underscore the government’s strong commitment to combating healthcare fraud. The False Claims Act stands as a powerful tool in this endeavor. Tips and complaints regarding potential fraud, waste, abuse, and mismanagement can be reported 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).
The matter was handled by Fraud Section Attorneys Carol Wallack and Edward Crooke, Assistant U.S. Attorneys Deborah Frey, Matthew Howatt, and Gregory David from the Eastern District of Pennsylvania, Jeffrey Powell, Peter Aronoff, Jean-David Barnea, and Samuel Dolinger from the Southern District of New York, and Ellen Bowden McIntyre from the Middle District of Tennessee.
It is important to note that the claims resolved by the settlement are allegations only, and there has been no determination of liability.
