The Department of Justice on Tuesday filed a lawsuit against health insurer Cigna alleging that the company submitted fraudulent Medicare Advantage claims to the Centers for Medicare and Medicaid Services. DOJ
The suit claims that between 2012 and 2017 Cigna used improper diagnostic codes for health conditions that its members did not have, were not recorded in medical records and were not based on clinically reliable information. Over the course of that time, CMS overpaid Cigna by more than $1.4 billion, according to the DOJ.
“[Cigna] intentionally misrepresented these health conditions as part of a widespread scheme to coax CMS into paying a higher capitated rate on behalf of Medicare beneficiaries enrolled in [Cigna’s] Medicare Advantage plans,” the DOJ said in its claim.
Cigna created its 360 Program in 2012, in which plan members would receive an “enhanced version of an annual wellness visit” from their primary care physician. The program was said to close gaps in care and detect health conditions that were going undetected.
“Even though [Cigna] pitched 360 in this manner, quality of care was not the underlying purpose of the 360 program,” the DOJ said. “The program centered on a business model devised by [Cigna] in which 360 would be used to find health conditions that could raise the risk scores of the Plan Members and therefore increase the monthly capitated payments that CMS paid to [Cigna].”
The lawsuit also alleges that Cigna sought out providers that were unfamiliar with patients’ health history to participate in the 360 program. Once participating providers conducted a certain volume of 360 visits, they received a $150 bonus per visit and were paid $1,000 each time they attended a 360 training seminar, the DOJ said.
The department is seeking an amount equal to three times the amount of the $1.4 billion in damages as well as a civil penalty of $11,000 for each violation.
WHY THIS MATTERS
Under Medicare Advantage, CMS pays health insurers a monthly capitated rate based on a beneficiary’s risk score, which is determined based on the member’s relative health status.
In this risk adjustment model, insurers received greater compensation for plan members that have serious and costly health conditions.
Cigna has said that it will defend itself against unjustified allegations.
THE LARGER TREND
Earlier this year, the DOJ hit Anthem with a similar lawsuit involving fraudulent Medicare Advantage risk scores.
The case accused Anthem of a one-sided review of a beneficiary’s medical chart to find additional codes to submit to CMS to gain revenue, without also identifying and deleting inaccurate diagnostic codes. This generated $100 million or more a year in additional revenue for Anthem, the DOJ said.
ON THE RECORD
“We are proud of our industry-leading Medicare Advantage program and the manner in which we conduct our business. We will vigorously defend Cigna against all unjustified allegations,” Cigna told Healthcare Finance News.