Cigna to pay $172M and $37M to settle 2 Medicare Advantage fraud lawsuits

The Cigna Group has settled two lawsuits alleging Medicare Advantage fraud.

The company will pay $172 million in a case brought by a whistleblower and the U.S. government alleging that it submitted false and inaccurate Medicare Advantage diagnostic codes to increase its reimbursement. The settlement resolved a False Claims Act lawsuit and an investigation related to past risk adjustment submissions from certain types of patient records.

The lawsuit claimed that the diagnostic codes in question were based on forms submitted by contracted vendors who conducted in-home assessments of Cigna members. The providers conducting those assessments, typically nurse practitioners, would not perform or order the types of tests or imaging services needed to diagnose serious illnesses and were barred by the insurer from providing treatment for those diagnoses during the visit.

In one example, federal prosecutors said Cigna submitted reimbursement documents for patients who were morbidly obese but did not submit medical records that showed their body mass index being above 35, which is a requirement for that particular diagnosis code.

“Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker,” said Damian Williams, U.S. attorney for the Southern District of New York. “The reported diagnoses of serious and complex conditions were based solely on cursory in-home assessments by providers who did not perform necessary diagnostic testing and imaging.”

As part of the settlement, Cigna will enter into a five-year corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.

“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,” said Chris DeRosa, president of Cigna Healthcare’s U.S. government business. “We are pleased to move beyond industrywide legal disputes related to past risk adjustment practices, and we look forward to continuing to provide high-quality, affordable Medicare Advantage coverage to our customers and delivering value to the taxpayers in the years ahead.”

In a related case, Cigna reached a $37 million settlement to resolve allegations that it submitted false and invalid patient diagnosis codes to artificially inflate the payments received for providing insurance coverage to its Medicare Advantage Plan members. The civil suit was originally filed by a whistleblower in the US District Court for the Southern District of New York and later transferred to the Middle District of Tennessee.

Related: Cigna sued (again) for allegedly using software that ‘automatically’ denies claims

“Over half of our nation’s Medicare beneficiaries are now enrolled in Medicare Advantage plans, and the government pays private insurers over $450 billion each year to provide for their care,” said Michael D. Granston, deputy assistant attorney general in the Justice Department’s Civil Division. “We will hold accountable those insurers who knowingly seek inflated Medicare payments by manipulating beneficiary diagnoses or any other applicable requirements.”