Health Law Daily Wrap Up, FALSE CLAIMS ACT—SETTLEMENT AGREEMENTS: Cigna Group to pay $135M to settle False Claims Act allegations, (Oct 13, 2023)

By Sherri M. Schroeder, J.D.

The U.S. alleges that Cigna Group both submitted false certifications stemming from a “chart review” program and knowingly submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity in order to increase Medicare Advantage payments.

HHS’s Office of Inspector General (OIG-HHS) has reached a settlement agreement with Cigna Group, a Delaware corporation with its principal place of business in Bloomfield, Connecticut, which owns and operates Medicare Advantage organizations. OIG-HHS alleged that Cigna operated a “chart review” program in order to obtain additional payments from CMS, but the chart reviews did not substantiate some diagnosis codes reported by health care providers. Nevertheless, Cigna allegedly submitted false certifications for the unsubstantiated, invalid diagnoses codes. In addition, OIG-HHS alleged that Cigna also submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity in order to increase its Medicare Advantage (MA) payments. To settle these False Claims Act allegations, Cigna agreed to pay over $135 million, plus interest, and entered into a Corporate Integrity Agreement (Settlement Agreement, September 29, 2023).

Chart review claims. OIG-HHS alleged that, for payment years 2014 through 2019, Cigna operated a “chart review” program through which it retrieved medical records from health care providers documenting services they had previously rendered to Medicare beneficiaries enrolled in Cigna’s plans. Cigna retained professional health care coders to conduct retrospective views of those charts to identify all risk-adjusting medical conditions supported by the charts. Cigna then allegedly relied on those results to submit additional diagnosis codes to CMS that the health care providers had not reported. However, Cigna’s chart reviews did not substantiate some diagnosis codes reported by the providers. Even though the health care providers had reported diagnosis codes for beneficiaries enrolled in Cigna’s MA plans that Cigna’s coders did not find when reviewing those beneficiaries’ charts, Cigna did not investigate or withdraw the unsubstantiated, invalid diagnoses codes that it had previously submitted for payment. Cigna then submitted false certifications to CMS concerning those codes.

Morbid obesity claims. OIG-HHS further alleged that, for payment years 2016 through 2021, Cigna knowingly submitted or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity to increase the payments it received from CMS for numerous beneficiaries enrolled in its MA plans. Although Cigna knew that individuals with a Body Mass Index below 35 cannot be properly diagnosed as morbidly obese, Cigna submitted or failed to delete inaccurate, false, or otherwise invalid diagnosis codes for morbid obesity, with actual knowledge of the falsity of the diagnosis code or with reckless disregard for or deliberate ignorance of the truth of the codes.

Settlement. While not admitting liability, Cigna agreed to pay $115,794,350 plus interest to settle the chart review allegations against it. Of this amount, $57,897,175 is restitution. Cigna also agreed to pay $19,500,000 plus interest to settle the morbid obesity claims against it. Of this amount, $9,750,000 is restitution. Cigna also agreed to enter into a five-year Corporate Integrity Agreement requiring it to implement numerous accountability and auditing provisions, including annual risk assessments and audits by an independent review organization.

Aggregate settlement. In a separate settlement agreement reached the same day, Cigna also agreed to pay $37 million to resolve separate allegations related to unsupported diagnoses codes for MA beneficiaries arising from Cigna’s home visit program (See $37M settlement ends U.S.’s lawsuit against Cigna for submitting allegedly false diagnosis codes from home visits to inflate payments, October 12, 2023). According to a U.S. Attorney's Office, Eastern District of Pennsylvania press release, Cigna will pay an aggregate settlement amount of $172,294,350 to resolve all allegations that, in order to increase its payments from Medicare, Cigna violated the False Claims Act by submitting and failing to withdraw inaccurate and untruthful diagnosis codes for its MA Plan enrollees. In the DOJ’s press release reporting the two settlement agreements, Christian J. Schrank, Deputy Inspector General for Investigations with HHS-OIG stated that “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,” describing such actions as “an affront to the Medicare program and the millions of patients who rely on its services.” He assured that, “Working with our law enforcement partners, our agency will continue to prioritize investigating alleged fraud that targets the Medicare Advantage program.”

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