Cigna Settles Medicare Advantage Cases for $172 Million

The Cigna Group, a Medicare Advantage Plan provider, has agreed to pay $172 million to settle multiple False Claims Act cases and investigations.  According to the DOJ’s press release, Cigna allegedly submitted inaccurate diagnoses codes to Medicare to increase their capitated rate payments.

What is a Medicare Advantage Plan?

Medicare Part C allows beneficiaries to receive Medicare-covered benefits through private insurance plans known as Medicare Advantage  Plans (MA Plans). The Centers for Medicare and Medicaid Services (CMS) pays MA Plans a fixed (also known as capitated) monthly amount for each enrolled beneficiary. To ensure the payments accurately reflect the expected cost of providing health care to each beneficiary, CMS uses a process called “risk adjustment” to adjust payments based on the health status of enrollees.  In plain terms, the sicker the MA Plan’s enrollees, the higher the capitated payments.

Cigna Settles Medicare Advantage Cases

According to the United States, Cigna operated a “chart review” program during the period 2014 to 2019. This initiative involved retrieving medical records from healthcare providers, reviewing them for relevant medical conditions, and assigning diagnoses codes to submit to CMS for additional payments. The United States contended that Cigna selectively used the results of these chart reviews to claim additional payments while neglecting to rectify or withdraw inaccurate diagnoses codes that could have led to overpayments.  The submission of  inaccurate and untruthful diagnoses codes for its MA Plan enrollees was intended to make the enrollees appear sicker than they were, ultimately aiming to inflate its payments from Medicare.

Furthermore, the United States alleged that Cigna reported diagnoses codes based solely on forms completed by vendors conducting in-home assessments. In many cases, these diagnoses were not supported by necessary diagnostic testing or imaging.  These allegations were first brought to light by whistleblower, Robert A. Cutler, a former part-owner of a vendor retained by Cigna to conduct these in-home assessments.  Mr. Cutler will receive $8 million from the settlement proceeds for his role as a whistleblower in the case.

Given the growth of Medicare Advantage plans, investigating fraud involving Medicare Part C is more important than ever. My office has prioritized combatting Medicare Advantage fraud, including applying data-driven investigative methods and working extensively with our law enforcement partners across the country.  We will hold accountable those who report unsupported diagnoses to inflate Medicare Advantage payments, such as unsupported diagnosis codes for morbid obesity.

Likewise, U.S. Attorney for the Southern District of New York, Damian Williams emphasized the government’s focus on holding insurers accountable:

Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker . . . This Office is committed to holding insurers accountable if they seek to manipulate the Medicare Advantage Program and boost their profits by submitting false information to the Government.

Notably, as part of the resolution in one suit, Cigna admitted and accepted responsibility for certain conduct relating to the in-home assessment allegations. As WLC’s Erica Blachman Hitchings discussed at a recent conference, several U.S. Attorney’s Offices, including the Southern District of New York, now require admissions in civil settlements.  This ensures that the public is aware of the conduct underlying a settlement.

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