In a significant settlement highlighting the critical issue of False Diagnosis in healthcare, The Cigna Group, a major health insurance provider headquartered in Connecticut, has agreed to a staggering $172 million payout. This settlement resolves allegations that Cigna knowingly submitted and failed to correct inaccurate diagnosis codes for its Medicare Advantage Plan enrollees, a move designed to illegally inflate its financial gains from Medicare. The case underscores the severe consequences of false diagnosis reporting within the complex landscape of Medicare Advantage programs.
The Medicare Advantage (MA) Program, also known as Medicare Part C, provides an alternative pathway for Medicare beneficiaries to receive their healthcare benefits via private insurance plans. These MA Plans are funded by the Centers for Medicare and Medicaid Services (CMS), which pays a fixed monthly sum for each enrolled beneficiary. Crucially, these monthly payments are adjusted based on “risk factors” associated with each beneficiary’s health. This risk adjustment mechanism is intended to ensure that MA Plans receive higher payments for sicker individuals expected to require more healthcare services, and conversely, lower payments for healthier individuals. To implement these adjustments, CMS relies on “risk adjustment” data, including medical diagnosis codes submitted by the MA Plans themselves.
Cigna, a prominent player in the health insurance market, operates MA Organizations that offer MA Plans across the United States. The core allegation against Cigna was that it deliberately submitted inaccurate and untruthful patient diagnosis data to CMS. This manipulation was allegedly carried out to artificially inflate the payments Cigna received from CMS. Furthermore, it was claimed that Cigna neglected to withdraw these inaccurate diagnoses and repay the resulting overpayments, and compounded the issue by falsely certifying the accuracy of this data to CMS. The recently announced settlement is the resolution of these serious accusations of fraudulent activity centered around false diagnosis reporting.
“With over half of our nation’s Medicare beneficiaries now opting for Medicare Advantage plans, and the federal 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 committed to rigorously pursuing insurers who intentionally seek inflated Medicare payments through schemes involving manipulated beneficiary diagnoses or any other form of fraudulent practice.” This statement emphasizes the government’s firm stance against false diagnosis and related fraudulent activities within Medicare Advantage.
The allegations detail specific methods Cigna allegedly employed to generate false diagnosis data. For payment years spanning 2014 to 2019, Cigna reportedly operated a “chart review” program. This program involved retrieving medical records, or “charts,” from healthcare providers detailing past services rendered to Cigna’s Medicare Advantage enrollees. Cigna then engaged diagnosis coders to scrutinize these charts, tasked with identifying all medical conditions purportedly supported by the records and assigning corresponding diagnosis codes. The results of these chart reviews were then used by Cigna to submit additional diagnosis codes to CMS – codes that the original healthcare providers had not initially reported. The goal was to secure increased payments from CMS.
However, the government’s investigation revealed a critical flaw in Cigna’s process. While Cigna used chart reviews to identify and submit additional diagnosis codes to increase revenue, these same reviews also revealed instances where diagnosis codes previously submitted by healthcare providers, and by Cigna to CMS, were not substantiated. Despite identifying these unsubstantiated and inaccurate diagnoses, Cigna allegedly failed to delete or withdraw them. Proper withdrawal would have necessitated Cigna reimbursing CMS for overpayments. The core of the allegation is that Cigna selectively used chart review results to maximize payments, actively seeking out opportunities for upcoding while deliberately ignoring findings that pointed to overpayments resulting from false diagnosis reporting.
U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania highlighted the increasing significance of combating fraud within Medicare Advantage plans, stating, “The growth of Medicare Advantage plans makes investigating fraud in Medicare Part C more critical than ever. My office is prioritizing the fight against Medicare Advantage fraud, employing data-driven investigative techniques and collaborating closely with our law enforcement partners nationwide. We will hold accountable those who submit unsupported diagnoses to inflate Medicare Advantage payments, including instances of false diagnosis codes such as those for morbid obesity.” This underscores the proactive approach being taken to identify and prosecute false diagnosis schemes.
Further allegations detailed Cigna’s use of in-home assessments conducted by vendors. These assessments involved healthcare providers, often nurse practitioners, visiting plan members at home. The government alleged that Cigna reported diagnosis codes to CMS based solely on forms completed by these vendors. Critically, the providers conducting these home visits did not perform or order the necessary diagnostic testing or imaging required to reliably diagnose the serious and complex conditions they reported. Furthermore, in many cases, Cigna allegedly restricted these providers from offering any treatment during these home visits for the very medical conditions they were purportedly diagnosing. The diagnoses in question lacked sufficient supporting documentation on the vendor-completed forms and were not corroborated by any other healthcare provider who had seen the patient during the relevant year. Despite these significant shortcomings, Cigna submitted these diagnoses to CMS to claim inflated payments and falsely certified annually that the submitted diagnosis data was “accurate, complete, and truthful.” This paints a picture of a systematic approach to generate false diagnoses for financial gain.
“For years, Cigna submitted false and invalid diagnosis information for its Medicare Advantage plan members to the Government. These reported diagnoses of serious and complex conditions were based merely on brief in-home assessments by providers who did not conduct necessary diagnostic testing and imaging. Cigna was fully aware that these diagnoses would artificially inflate its Medicare Advantage payments by making its plan members appear sicker than they were,” stated Damian Williams, United States Attorney for the Southern District of New York. “This Office is firmly committed to holding insurers accountable if they attempt to manipulate the Medicare Advantage Program and boost their profits by submitting false information to the Government.” This statement clearly outlines the intent and impact of Cigna’s alleged false diagnosis practices.
United States Attorney for the Middle District of Tennessee, Henry C. Leventis, emphasized the reliance on insurer integrity within the Medicare Advantage system: “Medicare Advantage depends on the integrity of its insurers and the accuracy of the diagnosis code information they provide, given its substantial influence on Medicare payments. We will continue to aggressively pursue fraud in this increasingly vital program.”
The investigation also highlighted Cigna’s alleged practices concerning false diagnosis of morbid obesity. For payment years 2016 to 2021, it was alleged that Cigna knowingly submitted and/or failed to remove inaccurate morbid obesity diagnosis codes. This was done to inflate payments from CMS. The medical records needed to support a morbid obesity diagnosis typically include Body Mass Index (BMI) recordings. A BMI below 35 is not clinically consistent with a diagnosis of morbid obesity. However, Cigna allegedly submitted or failed to correct false diagnosis codes for morbid obesity even for individuals with BMIs below this threshold, resulting in increased payments from CMS.
In conjunction with the 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 Cigna to implement extensive accountability and auditing measures. Annually, top executives and Board members 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 conduct comprehensive audits focusing on risk adjustment data, ensuring ongoing scrutiny of Cigna’s diagnosis coding practices.
“Medicare Advantage plans that submit false information to boost payments from CMS demonstrate a blatant disregard for the integrity of these crucial federal healthcare funds,” stated 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 related to the home visit allegations includes the resolution of a qui tam whistleblower claim brought by Robert A. Cutler, a former part-owner of a vendor contracted by Cigna for home visits. Under the False Claims Act’s qui tam provisions, private individuals can file lawsuits on behalf of the government and receive a portion of any recovered funds. Mr. Cutler will receive $8.14 million from the settlement related to the home visit allegations.
The successful resolution of this case was a collaborative effort involving the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania, the Southern District of New York, and the Middle District of Tennessee, with crucial assistance from HHS-OIG.
This case underscores the government’s strong commitment to combating healthcare fraud. The False Claims Act serves as a vital tool in these efforts. Individuals with information about potential fraud, waste, abuse, and mismanagement can 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).
It is important to note that the claims resolved by this settlement are allegations, and there has been no formal determination of liability.
