Maryland orders Cigna to halt underpaying doctors or give cause

Maryland regulators fined Cigna Health and Life Insurance Company $80,000 and ordered it to stop reducing payments on certain doctor-billed services — a practice that could leave patients on the hook for more of their health care costs.

“Insurers must either pay a claim, deny it with a stated reason, or request additional information,” MedChi CEO Gene Ransom told The Baltimore Sun. “Unilaterally rewriting the physician’s code is unacceptable. This action sends a clear message that abusive insurance practices will not be tolerated in Maryland.”

MedChi, also known as the Maryland State Medical Society, advocates for physicians, residents, and medical students. A complaint from a MedChi representative in August alerted the Maryland Insurance Administration to Cigna’s policy of downcoding, or changing a submitted medical billing code to a lower-level code, reducing reimbursement for services rendered. Insurance providers often claim that the cost-containment strategy is justified when the medical documentation does not support the higher code level submitted by the provider.

Cigna’s policy took effect in October, insurance administration spokesperson Craig Ey said. Cigna covers nearly 358,000 households in Maryland, although Ey said it is unknown how many residents were impacted by downcoding.

Cigna, whose CEO David Cordani earned $23.3 million in 2024, according to Becker’s Payer Issues, singled out doctors who consistently billed for higher-cost procedures than their peers and paid them for lower-cost treatment without explaining the changes, which is illegal under Maryland law, according to the Maryland Insurance Administration order. The 10-page finding requires Cigna to pay doctors within 30 days, or acknowledge receipt of their bill and provide one of three responses: deny the claim with a reason, dispute the legitimacy of the claim, or ask for additional information.

Effectively, the order gives insurers a choice between paying the bill, asking for more information or accusing the doctor of fraud or improper billing, Ransom said. Cigna’s practice cuts or delays payment for treatments already delivered, taking doctors’ time away from caring for patients.

The practice had angered physicians and their representatives around the country, including California, Texas, and Memphis, Tennessee.

A Cigna Healthcare spokesperson emailed The Baltimore Sun a statement stating, “Our Evaluation and Management policy is based on American Medical Association guidelines to promote more accurate reimbursement, and it only impacts around 1% of the physicians in our national network.

“Consistent with the Maryland Insurance Administration’s guidance and in compliance with Maryland law, we will continue limited reviews of certain claims to help ensure customers are protected from improper billing.”

The Maryland Insurance Administration investigated the top five health insurers in the state, including Cigna, in November, looking for instances of downcoding, but did not find the four other carriers engaging in the practice, Ey told The Sun via email Thursday. Previously, the administration issued a consent order to Aetna Health for downcoding in March 2021.

Although Cigna quoted that 1% impact figure to the administration, Ey said, “the MIA is not aware of the specific number of claims impacted. Cigna did reprocess all impacted claims back to the October 1, 2025, effective date as a result of the order.”

The American Medical Association advises medical practices “must keep a vigilant eye on payment details to identify downcoded claims,” as many insurers unilaterally downcode services without notice. Its policy advocates for insurers to reach out to outlier physicians first to address coding issues. The AMA policy also supports increased notification and communication with doctors about downcoded claims.

Ransom said Cigna’s reviews take a toll on patient care.

“Downcoding is not a harmless administrative adjustment,” he said. “It undermines physician judgment, delays payment for legitimate care, and ultimately harms patients by destabilizing the physician practices that care for them.”

Downcoding may shift costs onto the patient, similar to a claim denial, but Ey said that depends on many factors.

“It is possible that the practice of downcoding has impacts on patients, but the exact nature of the impact is likely determined by the service that is downcoded and the nature of the coverage a patient has,” Ey said. “Downcoding certainly creates administrative headaches for providers, which may cause downstream impacts for patients.”

If a provider believes they haven’t been properly reimbursed even after Cigna reprocessed their claims, they can file a complaint with the Maryland Insurance Administration online or by phone.

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