PHILADELPHIA– United States Attorney Jacqueline C. Romero announced that the Cigna Group (“Cigna”), a national insurer with corporate offices in Philadelphia, has agreed to pay $172,294,350 to resolve allegations that it violated the civil False Claims Act by submitting and failing to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees in order to increase its payments from Medicare. Of this amount, Cigna will pay $135,294,350 to resolve allegations arising from an investigation based out of the Eastern District of Pennsylvania.
“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,” said U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania. “We will hold accountable those who report unsupported diagnoses to inflate Medicare Advantage payment, such as unsupported diagnosis codes for morbid obesity.” Indeed, earlier this year, this office announced another Medicare Advantage settlement in a different case: https://www.justice.gov/usao-edpa/pr/primary-care-physicians-pay-15-million-resolve-false-claims-act-liability-submitting.
Under the Medicare Advantage (“MA”) Program, also known as Medicare Part C, Medicare beneficiaries have the option of obtaining their Medicare-covered benefits through private insurance plans called MA Plans. Over half of our nation’s Medicare beneficiaries are now enrolled in MA Plans, and the government pays private insurers over $450 billion each year to provide for their care. The Centers for Medicare and Medicaid Services (“CMS”) pays the MA Plans a fixed monthly amount for each beneficiary who enrolls. CMS adjusts these monthly payments to account for various “risk” factors that affect expected health expenditures for the beneficiary, to ensure that MA Plans are paid more for those beneficiaries expected to incur higher healthcare costs and less for healthier beneficiaries expected to incur lower costs. To make these adjustments, CMS collects “risk adjustment” data, including medical diagnosis codes, from the MA Plans.
Cigna owns and operates MA Organizations that offer MA Plans to beneficiaries across the country. The United States alleges 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 data and repay CMS, and falsely certified in writing to CMS that the data was accurate and truthful. The settlement announced today resolves these allegations.
The United States contends that, for payment years 2014 to 2019, Cigna operated a “chart review” program, pursuant to which it retrieved medical records (also known as “charts”) from healthcare providers documenting services they had previously rendered to Medicare beneficiaries enrolled in Cigna’s plans. Cigna retained diagnosis coders to review those charts to identify all medical conditions that the charts supported and to assign the beneficiaries diagnosis codes for those conditions. Cigna relied on the results of those chart reviews to submit additional diagnosis codes to CMS that the healthcare providers had not reported for the beneficiaries to obtain additional payments from CMS. However, Cigna’s chart reviews also did not substantiate some diagnosis codes that were reported by providers and previously submitted by Cigna to CMS. Cigna did not delete or withdraw these inaccurate and untruthful diagnosis codes, however, which would have required Cigna to reimburse CMS. Thus, the United States alleges that Cigna used the results of its chart reviews to identify instances where Cigna could seek additional payments from CMS, while improperly failing to use those same results when they provided information about instances where Cigna was overpaid.
The United States further contends that, for payment years 2016 to 2021, Cigna knowingly submitted and/or failed to delete or withdraw inaccurate and untruthful diagnosis codes for morbid obesity to increase the payments it received from CMS for numerous beneficiaries enrolled in its MA plans. The medical records for individuals diagnosed as morbidly obese typically include one or more Body Mass Index (“BMI”) recordings. Individuals with a BMI below 35 cannot properly be diagnosed as morbidly obese. However, Cigna submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity for individuals lacking a BMI of 35 or above, and these codes increased the payments made by CMS.
In connection with the settlement, Cigna 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”). The CIA requires that Cigna implement numerous accountability and auditing provisions. On an annual basis, top executives and members of the Board of Directors must make certifications about Cigna’s compliance measures, Cigna must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits focused on risk adjustment data.
“Today’s settlement shows our attention to and commitment in investigating all potential allegations of fraud against the Medicare Part C Program, no matter the complexity of the scheme,” said Maureen R. Dixon, Special Agent in Charge for HHS-OIG, Region III. “We will continue to partner with the United States Attorney’s Office to evaluate allegations brought under the False Claims Act to ensure the integrity of federal healthcare programs.”
The matter was handled in the Eastern District of Pennsylvania by Assistant U.S. Attorneys Deborah W. Frey and Matthew E. K. Howatt, Civil Chief Gregory B. David, auditor George Niedzwicki, and litigative consultants Lauren M. Cordrey and Priscilla Brandon, along with Civil Fraud Section attorney Carol L. Wallack and Assistant Director, Edward C. Crooke. HHS-OIG supported the investigation.
The remaining $37 million of the aggregate settlement amount above resolves allegations related to unsupported diagnoses for MA beneficiaries arising from Cigna’s home visit program. That separate settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act. That case is captioned United States ex rel. Cutler v. Cigna Corp., et al., No. 3:21-cv-00748 (M.D. Tenn.), which case was transferred from the Southern District of New York.
The investigation and resolution of this matter illustrate the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at https://oig.hhs.gov/fraud/report-fraud/ or 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.