On September 30, the U.S. Department of Justice (DOJ) announced a $172 million settlement with Cigna Group resolving allegations that the company violated the False Claims Act (FCA). The DOJ alleged that Cigna defrauded Medicare by submitting inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees.
Cigna operates Medicare Advantage Organizations that offer Medicare Advantage Plans to Medicare beneficiaries. The Centers for Medicare and Medicaid Services (CMS) pays Medicare Advantage Organizations for each beneficiary who enrolls and the payment is adjusted to account for various “risk” factors that affect expected health expenditures for the beneficiary.
According to the DOJ, “Cigna submitted inaccurate and untruthful patient diagnosis data to CMS in order to inflate the payments it received from CMS, failed to withdraw the inaccurate and untruthful diagnosis data and repay CMS, and falsely certified in writing to CMS that the data was accurate and truthful.”
“Medicare Advantage plans that submit false information to increase payments from CMS show blatant disregard for the integrity of these vital federal health care funds,” stated Christian J. Schrank, Deputy Inspector General for Investigations with HHS-OIG. “Such actions are an affront to the Medicare program and the millions of patients who rely on its services.”
Part of the settlement concerned specific allegations that Cigna submitted information to CMS based on cursory in-home assessments which did not involve diagnostic testing or imaging. The DOJ alleges that “Cigna submitted these diagnoses to CMS to claim increased payments, and falsely certified each year that the diagnosis data it submitted was ‘accurate, complete, and truthful.’”
“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.
The home-visit allegations stemmed from a qui tam whistleblower lawsuit filed by Robert A. Cutler, a former part-owner of a vendor retained by Cigna to conduct home visits. The False Claims Act’s qui tam provisions enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. Cutler will receive $8,140,000 from the settlement of the home visit allegations.
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”