Fri. Jan 27th, 2023

The Justice Department has intervened on a False Claims Act lawsuit against Cigna Corp. that alleges the insurer exaggerated the illnesses of its Medicare members to obtain higher payments from the federal government. 

The whistleblower lawsuit, filed in 2017 in a New York federal court by a former service provider for Cigna’s Medicare Advantage subsidiary HealthSpring, accuses Cigna of bilking the federal government out of $1.4 billion by submitting improper diagnostic codes from 2012 to 2019. The codes were allegedly based on health conditions that did not exist in the patient or were not found in any medical record. 

Earlier this month, the court granted the Justice Department’s motion to partially intervene in the case, specifically on the allegations that Cigna billed Medicare for risk-adjustment payments based on diagnoses that lacked the testing, imaging or other necessary clinical steps. The Medicare Advantage beneficiaries did not receive any medical treatment for these conditions during  home visits or from any other medical provider over the course of a year, the DOJ alleges. 

A Cigna spokesperson said the company will vigorously defend its Medicare Advantage business against the allegations.

The Justice Department, which did not immediately respond to a request for comment, initially declined to intervene in February 2020 but reserved the right to join the lawsuit at a later date “upon a showing of good cause.” The DOJ has until Sept. 30 to file its own complaint. The federal government intervenes on whistleblower cases less than 25% of the time.

DOJ joined lawsuits alleging similar Medicare Advantage fraud against insurers UnitedHealth Group and Anthem in 2017 and 2020, respectively. The federal government intervened in September in a FCA case against Independent Health and now-defunct DxID, alleging the New York health insurer and data mining company conspired to upcode risk scores. Each case is pending. 

Also last year, the DOJ consolidated six alleged Medicare Advantage fraud cases against Kaiser Permanente health plans. Northern California-based health system Sutter Health agreed to pay $90 million in August 2021 to settle a case involving similar fraud claims.

The federal government pays Medicare Advantage plans a monthly per-member rate, based on the health status of beneficiaries. Beneficiaries who have more health issues receive a higher risk score, which translates to higher federal payments. 

Improper payments to those plans exceeded $16.2 billion in 2020, according to Centers for Medicare and Medicaid Services data. That represented 6.8% of all Medicare Advantage payments in 2020, the agency found. 

Meanwhile, both insurers and providers are reportedly investing more in their billing and coding departments as they look to maximize reimbursement. 



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