Cigna to Pay $173M to Settle False Claims Act Litigation Filed by Whistleblower

Health insurance giant Cigna agreed to pay nearly $173 million to resolve allegations it violated the False Claims Act by knowingly submitting false diagnosis codes under the federal Medicare Advantage program to increase its payments.

In a lawsuit filed last year, the feds alleged that between 2014 and 2019, Cigna submitted to the Centers for Medicare and Medicaid Services (CMS) false and invalid diagnoses of certain serious and chronic medical conditions that were based only on forms completed during visits to patients’ homes that were conducted by vendors hired by Cigna for its 360 Home Visit Program.

How the Alleged Fraud Worked

Home visits typically were conducted by nurse practitioners or other non-physician healthcare providers such as registered nurses and physician assistants. The complaint alleges that the purpose of the visits was not to treat patients’ medical conditions, and that Cigna explicitly prohibited the healthcare professionals from providing patient treatment or care.

In a clear violation of the False Claims Act, “Cigna expressly structured the 360 home visits for the primary purpose of capturing and recording lucrative diagnosis codes that would significantly increase the monthly capitated payments made by CMS to the Cigna MA Organizations,†according to the lawsuit, which originally was filed by a former Cigna vendor, in what is known as a whistleblower or Qui Tam case.

How the Medicare Advantage Program Works

Under the Medicare Advantage program, also known as Medicare Part C, patients can obtain their benefits through private insurance plans. CMS pays these plans a fixed monthly amount for each Medicare patient who enrolls. CMS adjusts these monthly payments to account for various “risk†factors that affect expected health costs for the patient, to ensure that the Medicare Advantage plans are paid more for those patients expected to incur higher healthcare costs and less for healthier patients expected to incur lower costs. To make these adjustments, CMS collects risk adjustment data, including medical diagnosis codes, from the plans.

More than half of the country’s Medicare patients are enrolled in Medicare Advantage plans, and the government pays private insurers more than $450 billion each year to provide for their care.

What the False Claims Act Lawsuit Alleged

The lawsuit alleged Cigna knew that:

• The vendor healthcare providers who conducted these home visits did not perform or order the testing, imaging, or other diagnostic steps needed to reliably diagnose these conditions.
• The patients did not receive any treatment for the so-called medical conditions during the home visits.
• No other healthcare providers, such as the patients’ primary care physicians, had diagnosed or treated the patients for these medical conditions during the year in which the home visits occurred.
• The diagnoses did not comply with CMS’s requirements for coding diagnoses.

Regardless, Cigna submitted these diagnoses to CMS to claim increased payments, and in violation of the False Claims Act, falsely certified every year that their diagnosis data submissions were “accurate, complete, and truthful.†The invalid diagnoses included, but were not limited to, diagnoses for chronic kidney disease, congestive heart failure, rheumatoid arthritis, and diabetes with renal complications.

What the Feds Say

“For years, Cigna submitted to the government false and invalid diagnosis information for its Medicare Advantage plan members. 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,†said Damian Williams, United States Attorney for the Southern District of New York.

Other Settlement Terms

In addition to the payment, Cigna entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General which requires that Cigna implement numerous accountability and auditing provisions. Every year, 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.

What the Whistleblower Receives

Under the provisions of the Qui Tam Act, a private party can file an action on behalf of the United States and receive a portion of any recovery. Cutler, the whistleblower who filed the original lawsuit, will receive $8.1 million.

How We Can Help

The Health Law Offices of Anthony C. Vitale handles matters relating to whistleblower representation as well as Medicare and Medicaid fraud defense. For more information, contact us at 305-358-4500 or email info@vitalehealthlaw.com.