N.Y. U.S. Attorney: United States Files Civil Fraud Lawsuit Against CIGNA for Artificially Inflating Its Medicare Advantage Payments

NEW YORK, Oct. 18 -- The U.S. Attorney for the Southern District of New York, Damian Williams, issued the following news release:

Damian Williams, the United States Attorney for the Southern District of New York, announced that the United States has filed a civil healthcare fraud lawsuit against CIGNA CORPORATION and its subsidiary Medicare Advantage Organizations (collectively, "CIGNA"). The lawsuit seeks damages and penalties under the False Claims Act for CIGNA's submissions to the Government of false and invalid patient diagnosis codes to artificially inflate the payments CIGNA received for providing insurance coverage to its Medicare Advantage plan members. The Government is intervening in a lawsuit filed by a whistleblower, which was originally filed in the United States District Court for the Southern District of New York and later transferred to the Middle District of Tennessee.

The Government's complaint alleges that the reported diagnoses codes were based solely on forms completed by vendors retained and paid by CIGNA to conduct in-home assessments of plan members. The healthcare providers (typically nurse practitioners) who conducted these home visits did not perform or order the testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions reported and were prohibited by CIGNA from providing any treatment during the home visit for the medical conditions they purportedly found. The diagnoses at issue were not supported by the information documented on the form completed by the vendor and were not reported to CIGNA by any other healthcare provider who saw the patient during the year in which the home visit occurred. Nevertheless, CIGNA submitted these diagnoses to the Government to claim increased payments and falsely certified on an annual basis that its diagnosis data submissions were "accurate, complete, and truthful."

U.S. Attorney Damian Williams said: "As alleged, CIGNA obtained tens of millions of dollars in Medicare funding by submitting to the Government false and invalid diagnoses for its Medicare Advantage plan members. CIGNA knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker. 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."

Medicare Advantage, also known as the Medicare Part C program, provides health insurance coverage for tens of millions of Americans who opt out of traditional Medicare. Under Medicare Part C, Medicare Advantage Organizations ("MAOs"), typically operated by private insurers like CIGNA, provide coverage for Medicare beneficiaries. In return, MAOs receive capitated payments from the Centers for Medicare and Medicaid Services ("CMS") based on demographic information and the diagnoses of each plan beneficiary. MAOs submit diagnosis data, typically passed along from beneficiaries' healthcare providers, to CMS. CMS then uses that diagnosis data, in conjunction with demographic factors, to calculate a "risk score" for each beneficiary and, in turn, the amount of the monthly capitated payment that the MAO will receive for covering that beneficiary. The Medicare Advantage payment model is intended to pay MAOs more to provide healthcare for sicker enrollees (expected to incur higher healthcare costs) and less for healthier enrollees (expected to incur lower costs).

The following allegations are based on the Complaint that was filed in federal court:

CIGNA, through its subsidiaries and affiliates, owns and operates numerous MAOs that administer Medicare Advantage Plans. CIGNA contracted with several vendors to conduct home visits of Medicare Advantage plan members across the country as part of its broader so-called "360 comprehensive assessment" program. The home visits were typically conducted by nurse practitioners, and on occasion by other non-physician healthcare providers such as registered nurses and physician assistants (the "Vendor HCPs"). Based on the visit, the Vendor HCPs completed a CIGNA-created form ("360 form") that included a check-the-box multi-page list of a wide range of medical conditions. CIGNA had its coding teams identify diagnosis codes that corresponded to the recorded medical conditions and then submitted those to CMS for risk adjustment payment purposes.

CIGNA structured the 360 home visits for the primary purpose of capturing and recording lucrative diagnosis codes that would significantly increase the monthly capitated payments it received from CMS. The purpose of the visits was not to treat patients' medical conditions, and CIGNA explicitly prohibited the Vendor HCPs from providing actual patient treatment or care. As CIGNA acknowledged in an internal document discussing the program, "[t]the primary goal of a 360 visit is administrative code capture and not chronic care or acute care management." But this was not disclosed to CIGNA's plan members when the home visit was scheduled or during the actual visit. When identifying plan members to receive home visits, CIGNA targeted individuals who were likely to yield the greatest risk score increases and thus the greatest increased payment.

The Vendor HCPs spent limited time with the patients and did not conduct a comprehensive physical examination. When completing the assessments and recording the diagnoses, the Vendor HCPs relied largely on the patient's own self-assessment and their responses to various basic screening questions. Vendor HCPs did not have access to the patient's full medical history and typically did not obtain or review relevant records from the patient's primary care physician in advance of the visit.

CIGNA's 360 home visit program regularly generated false and invalid diagnosis codes for certain serious, complex conditions that cannot be reliably diagnosed in a home setting and without extensive diagnostic testing or imaging. In tens of thousands of instances, CIGNA submitted diagnosis codes that represent serious, complex medical conditions that (a) were based only on the home visits conducted by the Vendor HCPs; (b) required specific testing or imaging to be reliably diagnosed, which was not performed; (c) were not supported by the information documented on the 360 form completed by the Vendor HCPs; and (d) were not reported by any other healthcare provider who saw the plan member during the year in which the home visit occurred (the "Invalid Diagnoses"). The Invalid Diagnoses included, but are not limited to, diagnoses for complex medical conditions such as chronic kidney disease, congestive heart failure, rheumatoid arthritis, and diabetes with renal complications. According to CIGNA's own clinical guidelines, accurately diagnosing these conditions requires specialized testing.

CIGNA exerted pressure on Vendor HCPs to record high-value diagnoses that significantly increased risk adjustment payments. CIGNA management identified at least twelve classes of generic chronic diagnoses that they thought were "often underdiagnosed" among its Plan members and, through trainings and seminars, encouraged the Vendor HCPs to make these diagnoses during the home visits. CIGNA also closely tracked the volume and nature of the diagnoses generated by each vendor's home visits, as well as how the diagnoses affected risk-adjusted payments. CIGNA provided trainings to vendors to improve their "performance" when they failed to deliver the expected level of high-value diagnosis codes.

Indeed, CIGNA tracked the return on investment of the 360 home visit program by comparing the costs of the in-home visits (i.e., payments to vendors) against the additional Part C payments generated by increased risk scores. For example, according to an internal report, CIGNA determined that, during the first nine months of 2014, one vendor's 6,658 in-home visits resulted in more than an additional $14 million in Medicare payments, which dwarfed the approximately $2.13 million that CIGNA paid to the vendor. When specific providers were found to have captured fewer diagnoses than expected, CIGNA asked the vendor to prepare a "performance improvement plan" for the provider.

The Invalid Diagnoses generated by the 360 home visits also did not conform with the International Classification of Diseases ("ICD") Office Guidelines for Coding and Reporting (the "ICD Guidelines"), as required by applicable federal regulations. The Invalid Diagnoses did not affect patient care, treatment, or management during the home visit, as required under the ICD Guidelines, and thus were ineligible for risk adjustment. In addition, the Invalid Diagnoses were not supported by the minimal information recorded on the 360 forms, in violation of the ICD Guidelines' medical record documentation requirement. In fact, in some cases, the 360 forms include clinical exam findings that contradict the supposed diagnosis. For example, one patient received a congestive heart failure diagnosis from a home visit even though the 360 form explicitly noted that physical exam results found her heart to be "regular" and "normal" and stated, "cardiac reviewed and unremarkable."

Through its 360 home visit program, CIGNA submitted diagnosis codes for tens of thousands of Invalid Diagnoses to CMS that constituted false claims for payment. Based on these unlawful false claims, CIGNA improperly received tens of millions of dollars in risk adjustment payments from CMS, in violation of both the False Claims Act and the common law.

Mr. Williams thanked HHS-OIG and the U.S. Attorney's Office for the Middle District of Tennessee for their assistance with this case.

This case is being handled by the Office's Civil Frauds Unit. Assistant U.S. Attorney Peter Aronoff is in charge of this case.

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Original text here: https://www.justice.gov/usao-sdny/pr/united-states-files-civil-fraud-lawsuit-against-cigna-artificially-inflating-its