Connecticut-based insurer Cigna has reached a settlement with the federal Department of Justice (DOJ) over allegations that the company violated the False Claims Act through “untruthful diagnosis codes” in order to increase payments the company received from the Centers for Medicare and Medicaid Services (CMS).
According to a press release from the DOJ, Cigna owned and operated private plans under the Medicare Advantage Program, to which CMS pays a set monthly amount that is adjusted based on the insured’s health condition. Cigna was accused of manipulating the health data of the insured individuals in these plans to elicit higher CMS payments.
“The United States alleged that Cigna submitted inaccurate and untruthful patient diagnosis data to CMS in order to inflate the payments it received from CMS, failed to withdraw the inaccurate and untruthful diagnosis and repay CMS, and falsely certified in writing to CMS that the data was accurate and truthful,” the DOJ press release said.
According to the press release, the insurance giant did this primarily through three ways: altering chart data for beneficiaries by adding additional diagnosis codes not supported by the healthcare provider; by using forms submitted by visiting home nurses to submit diagnosis codes to CMS that could not be supported by the healthcare provider; and by diagnosing patients as “morbidly obese,” even though their body mass index was below the required 35 percent threshold for CMS.
“For years, Cigna submitted to the Government false and invalid diagnosis information for its Medicare Advantage plan members,” 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. Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker.”
The investigation into Cigna by U.S. Attorney’s in New York, Pennsylvania and Tennessee was apparently partially spurred by a whistleblower. According to the press release, David Cutler had previously been a part-owner of a home healthcare vendor used by Cigna. Cutler will receive $8.1 million from the settlement because he filed an action on behalf of the federal government.
In a press release, Cigna said that as part of the resolution they 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 industry-wide 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.”
Cigna was recently selected again as Connecticut’s dental plan coordinator following a competitive bidding process, according to a press release by Connecticut Comptroller Sean Scanlon. The contract will become effective in 2024 and will last for five years, lowering the out-of-pocket cost of dental insurance for state employees.
Cigna also submitted a request to the Connecticut Insurance Department in June for a 23 percent rate increase for their small group policies. It was one of many rate increases requested by insurers for small group and individual insurance plans on and off Connecticut’s insurance exchange, which elicited outcry from the public and lawmakers, who say insurance rate increases need to be more thoroughly vetted.
Ultimately the Insurance Department approved a 13.8 percent rate increase for Cigna. Overall, the average rate increase for all rate increase requests was 9.4 percent.
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