Cigna received millions of Medicare dollars based on invalid diagnoses, lawsuit claims

Health care giant Cigna improperly obtained tens of millions of dollars in Medicare funding by making certain Medicare Part C recipients seem sicker than they actually were, the federal government alleged in a civil lawsuit filed Monday.

Cigna submitted false and invalid diagnoses to artificially inflate the payments it would receive for providing insurance coverage to its Medicare Advantage plan members, the suit said.

The lawsuit resulted from a whistleblower complaint and seeks damages and penalties.

"CIGNA knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker," Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement. "This Office is dedicated to holding insurers accountable if they seek to manipulate the system and boost their profits by submitting false information to the Government."

Cigna relied on diagnoses based solely on forms completed by vendors retained and paid by the company to conduct in-home assessments of plan members, according to the lawsuit.

The nurse practitioners who typically conducted these home visits did not perform or order the testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions reported, the lawsuit claims.

The nurse practitioners spent limited time with the patients and did not conduct a comprehensive physical examination. Instead, they relied largely on the patient's own self-assessment and their responses to various basic screening questions, the government said.

There was allegedly no access to the patient's full medical history and they typically did not obtain or review relevant medical records in advance of the visit.

Still, Cigna submitted these diagnoses to Medicare to claim increased payments and falsely certified on an annual basis that its diagnosis data submissions were "accurate, complete, and truthful," the lawsuit said.

In response to the lawsuit, Cigna said in a statement: "We are proud of the high-quality, affordable Medicare Advantage benefits we are privileged to provide to beneficiaries nationwide in compliance with government rules. We reject these allegations and will vigorously defend our Medicare Advantage business against them. Our focus remains on serving our Medicare customers and advancing our mission of making health care more affordable, predictable, and simple for all."

Medicare Advantage, also known as Medicare Part C, provides health insurance for tens of millions of Americans who opt out of traditional Medicare through private insurers like Cigna. They receive payments from the Centers for Medicare and Medicaid Services based on demographic information and the diagnoses of each beneficiary.

CMS then uses the diagnosis data, in conjunction with demographic factors, to calculate a "risk score" for each beneficiary and, in turn, the amount of the monthly payment the private insurer will receive for covering that beneficiary. The model is intended to pay more to provide health care for sicker enrollees.

According to the government's lawsuit, Cigna structured home visits for the primary purpose of capturing and recording lucrative diagnosis codes that would significantly increase the monthly capitated payments it received from CMS.

When identifying plan members to receive home visits, the lawsuit said Cigna targeted individuals who were likely to yield the greatest risk score increases and thus the greatest increased payment.