Health insurer Cigna will pay over $172 million to settle claims of submitting false diagnosis codes under Medicare Advantage. Federal prosecutors alleged Cigna’s submission of inaccurate codes between 2016 and 2021 inflated Medicare Advantage payments. The insurer was accused of misrepresenting patients’ conditions based on superficial assessments, violating the False Claims Act. Cigna settled to avoid a prolonged legal battle, agreeing to a five-year corporate-integrity arrangement with the Department of Health and Human Services. This comes amid a separate class-action lawsuit alleging Cigna’s use of an algorithm to deny medical claims.
Health insurance giant Cigna has agreed to pay a hefty sum of over $172 million to settle allegations made by federal authorities that it deliberately submitted false diagnosis codes under the Medicare Advantage program. According to the U.S. Department of Justice, Cigna violated the False Claims Act by knowingly inputting inaccurate codes for Medicare Advantage beneficiaries between 2016 and 2021. Federal prosecutors claimed that Cigna’s actions led to inflated Medicare Advantage payments, as the false codes made plan members appear sicker than they actually were.
The charges accused Cigna of reporting serious and complex conditions based on superficial in-home assessments, lacking necessary diagnostic testing and imaging. Medicare Advantage Plans, also known as “Part C” or “MA Plans,” are offered by private companies approved by Medicare and cater primarily to Americans aged 65 and older. More than half of the nation’s Medicare beneficiaries are enrolled in Medicare Advantage, and the federal government pays private insurers over $450 billion annually for health coverage.
One instance highlighted in the case involved Cigna submitting reimbursement documents for patients identified as morbidly obese without providing medical records confirming their body mass index met the required threshold of above 35 for that specific diagnosis code.
In response to the settlement, Cigna acknowledged the resolution of the prolonged legal dispute, stating that it avoided the uncertainties and additional expenses associated with a protracted legal battle. As part of the agreement, Cigna will enter a five-year corporate-integrity arrangement with the Department of Health and Human Services’ inspector general office, aimed at ensuring compliance with federal health program regulations.
This settlement occurs amidst a separate class-action lawsuit against Cigna, alleging the company’s use of an algorithm called PxDx to deny specific medical claims, ultimately reducing costs and streamlining the claims process for the insurer.
