By Dean Seal


The U.S. Department of Justice has filed a civil fraud lawsuit against Cigna Corp. for allegedly inflating payments it received for insuring Medicare Advantage plan members.

Manhattan federal prosecutors said Monday that Cigna and its subsidiary, Medicare Advantage Organizations, violated the False Claims Act by allegedly filing false and invalid patient diagnosis codes to increase the payments they would receive for providing insurance coverage to the subsidiary's plan members.

A Cigna spokeswoman said the company denies the allegations and will vigorously defend its Medicare Advantage business against them.

According to the suit, Cigna contracted with vendors to conduct home visits of Medicare Advantage plan members across the country, but the healthcare providers conducting the home visits didn't perform or order the testing that would have been necessary to diagnose the serious and complex conditions that were being reported.

The providers were also barred by Cigna from providing any treatment during the home visit for conditions that were purportedly found, the DOJ alleged.

The diagnoses at issue weren't supported by any documented information from the vendors and weren't reported to Cigna by any other healthcare provider who had seen the same patients at issue, prosecutors alleged. Cigna still submitted the diagnoses to the government to fetch larger payments and falsely certified that the submissions were accurate, the suit claims.

U.S. Attorney Damian Williams said false submissions netted Cigna tens of millions of dollars in Medicare funding.

"Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker," Mr. Williams said.

The Office of Inspector General of the Department of Health and Human Services said in a report last month that Medicare insurers had obtained $9.2 billion in federal payments in just one year through controversial billing practices, and that 20 companies in particular accounted for more than half of that sum.

The report, focused on the procedures that insurers use to document health conditions, is a sign that federal health investigators are ramping up their scrutiny of Medicare Advantage insurers that offer privately managed plans under the federal benefit program.


Write to Dean Seal at dean.seal@wsj.com


(END) Dow Jones Newswires

10-17-22 1341ET