Feds sue Cigna over alleged Medicare Advantage overpayments linked to home assessments

The federal government has filed suit against Cigna, alleging that the insurer submitted false and inaccurate Medicare Advantage diagnostic codes in a bid to boost its reimbursement.

The Department of Justice (DOJ) will intervene in a suit initially filed by a whistleblower, the agency said Monday. The suit claims that the diagnostic codes in question were based on forms submitted by contracted vendors who conducted in-home assessments of Cigna members. The providers conducting those assessments, typically nurse practitioners, would not perform or order the types of tests or imaging services needed to diagnose serious illnesses and were barred by the insurer from providing treatment for those diagnoses during the visit, DOJ said.

The diagnoses in question were not supported in either the home visit form or in other documentation submitted by providers the patient may have seen throughout the year, but they were submitted to the federal government to secure higher payments, DOJ said.

"Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker," U.S. Attorney Damian Williams said in the announcement. "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 said in a statement to Fierce Healthcare that it plans to "vigorously defend" itself in the case.

“We are proud of the high-quality, affordable Medicare Advantage benefits we are privileged to provide to beneficiaries nationwide in compliance with government rules," Cigna said. "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.”

DOJ said that Cigna structured and designed the home visits for the goal of recording diagnostic codes that it could use to boost its monthly capitated payments from the Centers for Medicare & Medicaid Services (CMS), with an internal document saying “[t]the primary goal of a 360 visit is administrative code capture and not chronic care or acute care management.” This was not disclosed to the member, however, according to the agency.

As the vendor providers were not allowed to perform care services, their assessments were largely based on self-reported patient data and their responses to basic screening questions. They could not perform extensive physical examinations, nor did they have access to the patient's medical history, according to the lawsuit.

Cigna tracked the return on investment for these home visits and would offer "performance improvement" plans to the vendors that did not generate enough money, DOJ said. For example, one vendor conducted 6,658 in-home visits in the first nine months of 2014, which generated $14 million in payments from CMS, DOJ said.

Risk adjustment, and the likelihood that insurers use it to juice MA payments, has been a hot topic among policymakers and industry critics, with legislators saying they were "disheartened" by CMS' oversight of MA. The Office of Inspector General has flagged home assessments like those at the center of this latest lawsuit as a potential source of overpayment, estimating that Medicare paid out $2.6 billion in 2017 for diagnoses related only to these home visits.