Health Law alert by Lamb McErlane PC attorneys Vasilios J. Kalogredis, Esq. and Sonal Parekh, Esq.

On September 29, 2023, the Cigna Group (“Cigna”) agreed to pay $172,294,350 (“Settlement Amount”) to resolve allegations that it violated the civil False Claims Act (“FCA”) by submitting, and failing to withdraw, inaccurate and untruthful diagnosis codes for its Medicare Advantage (“MA”) Plan enrollees in order to increase its payments from Medicare.

Background

Under the MA Program, aka Medicare Part C, Medicare beneficiaries have the option of obtaining their Medicare-covered benefits through private insurance plans (“MA Plans”). The Centers for Medicare and Medicaid Services (“CMS”) pays the MA Plans a fixed monthly amount, adjusted by various “risk” factors[1], for each enrolled beneficiary.

Allegations Made by the U.S. Government

The U.S. government alleged that Cigna (1) submitted inaccurate and untruthful patient diagnosis data to CMS in order to magnify the payments it received from CMS, (2) failed to withdraw the data and repay CMS, and (3) falsely certified in writing to CMS that the data was accurate and truthful.

Specifically, for payment years 2014 to 2019, Cigna retained diagnosis coders to review medical records (“charts”) of Medicare beneficiaries enrolled in Cigna’s MA Plans that were received from healthcare providers. The coders reviewed the charts to identify all medical conditions supported by the charts and assign additional diagnosis codes for those identified conditions, which would result in increased reimbursements from CMS. The government alleged that while Cigna used the results of its chart reviews to identify instances where Cigna could seek additional payments from CMS, it improperly failed to use the same results when they provided information for instances where Cigna was overpaid.

Several examples of Cigna’s submitting (and failing to withdraw) inaccurate and untruthful diagnosis codes were provided by federal prosecutors, in the Complaint against Cigna. For example, for payment years 2016 to 2021, Cigna knowingly submitted and/or failed to withdraw inaccurate diagnosis codes for morbid obesity (despite not having the specific BMI indicators present for morbid obesity) to obtain inflated payments from CMS.

Settlement Specifics

Of the Settlement Amount, $135,294,350 will be paid to resolve the allegations arising from an investigation based out of the U.S. Attorney’s Office, Eastern District of Pennsylvania and the remaining $37 million will be paid to resolve claims brought under the qui tam provisions of the FCA relating to unsupported diagnoses for MA beneficiaries arising from Cigna’s home visit program.[2]

Additionally, Cigna entered into a 5-year Corporate Integrity Agreement with the Office of Inspector General (“OIG”), which requires numerous accountability and auditing provisions, including annual certifications by top executives, annual risk assessments, multi-faceted audits conducted by an independent review organization, and other monitoring measures.

This is not the only claim Cigna is facing or has faced in recent years. The DOJ remains committed to investigating all instances of fraud, especially as it relates to the Medicare Part C Program.

[1] To make these adjustments, CMS collects “risk adjustment” data which includes medical diagnosis codes from the MA Plans.

[2] See the case United States ex rel. Cutler v. Cigna Corp., et al., No. 3:21-cv-00748 (M.D. Tenn.).

*This alert is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.