Cigna Group Agrees to Pay $172 Million to Settle False Claims Act Allegations

Cigna Group, a prominent national insurer headquartered in Philadelphia, has reached a settlement agreement to pay $172,294,350 to resolve allegations of violating the civil False Claims Act. The allegations revolve around Cigna's submission and retention of inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan beneficiaries, a practice aimed at increasing Medicare payments. Of this total amount, Cigna will pay $135,294,350 as part of the settlement, stemming from an investigation conducted in the Eastern District of Pennsylvania.

The investigation uncovered practices wherein Cigna submitted patient diagnosis data to the Centers for Medicare and Medicaid Services (CMS) that was both inaccurate and untruthful. These actions were taken to inflate the payments received from CMS. The settlement announced today addresses these allegations and underscores the importance of maintaining integrity in the healthcare system.

U.S. Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania emphasized the significance of addressing Medicare Advantage fraud. She noted that Medicare Advantage plans' growth necessitates thorough investigation of potential fraud, including data-driven methods and collaboration with law enforcement partners across the country. U.S. Attorney Romero stressed the commitment to holding those accountable who report unsupported diagnoses with the intent of inflating Medicare Advantage payments.

Medicare Advantage, also known as Medicare Part C, allows beneficiaries to receive Medicare-covered benefits through private insurance plans like MA Plans. These plans are increasingly popular, with over half of the nation's Medicare beneficiaries enrolled in them, leading to the government disbursing over $450 billion annually to private insurers for beneficiary care. To determine payments, CMS collects "risk adjustment" data, including medical diagnosis codes, from MA Plans.

The investigation revealed that Cigna operated a "chart review" program from 2014 to 2019, wherein it retrieved medical records from healthcare providers. These records documented services rendered to Medicare beneficiaries under Cigna's plans. Diagnosis coders were hired to review these charts, identify supported medical conditions, and assign diagnosis codes. While Cigna used this data to submit additional diagnosis codes to CMS to increase payments, it also failed to withdraw inaccurate codes or repay CMS for overpayments.

Moreover, the investigation found that from 2016 to 2021, Cigna knowingly submitted or failed to remove inaccurate diagnosis codes for morbid obesity, resulting in higher CMS payments. Medical records for morbidly obese individuals typically contain Body Mass Index (BMI) recordings. However, Cigna submitted or retained codes for individuals without a BMI of 35 or higher, inaccurately categorizing them as morbidly obese and increasing CMS payments.

As part of the settlement, Cigna has 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 mandates various accountability and auditing provisions, including certifications by top executives and Board members, annual risk assessments, and multi-faceted audits conducted by an independent review organization.

The remaining $37 million of the settlement resolves allegations related to unsupported diagnoses for MA beneficiaries arising from Cigna's home visit program. These claims were brought under the False Claims Act's whistleblower provisions.

Maureen R. Dixon, Special Agent in Charge for HHS-OIG, Region III, affirmed the commitment to investigating fraud within the Medicare Part C Program, regardless of the scheme's complexity. The partnership with the United States Attorney's Office aims to preserve the integrity of federal healthcare programs.

The investigation was conducted by the Eastern District of Pennsylvania's Assistant U.S. Attorneys Deborah W. Frey and Matthew E. K. Howatt, along with other key team members, with support from HHS-OIG.