News: Cigna to pay $172 million settlement for alleged Medicare Advantage fraud

Following the lawsuit filed against Cigna for allegedly denying 300,000 requests for payments over two months in 2022 through the PXDX algorithm, Cigna will pay $172.3 million to resolve the allegations, according to a press release from the United States Attorney’s Office. The release also alleged that Cigna falsely certified that the submitted data was accurate, failed to withdraw it, and did not repay CMS, Becker’s Payer Issues reported.

The Justice Department further alleges that Cigna failed to verify the accuracy of diagnosis codes reported by providers before submitting to CMS. They also reviewed charts to identify where additional payments from CMS could be received for payment years 2014 to 2019. From 2016 to 2021, they allege that Cigna specifically submitted inaccurate codes for morbid obesity and failed to withdraw them.

Of the $172.3 million settlement, Cigna is paying $135.3 million to resolve the Justice Department’s allegations and the remaining $37 million to resolve allegations related to unsupported diagnoses for Medicare Advantage enrollees that received in-home services from Cigna. Cigna has also agreed to five years of accountability and auditing with the Office of Inspector General as part of the settlement. Company executives and board members will be required to certify Cigna’s compliance, conduct annual risk assessments, and submit to independent risk adjustment audits.

“These agreements fully resolve long-running legal matters, enabling us to focus our resources on all those we serve and avoiding the uncertainty and further expense of protracted litigation,” says Chris DeRosa, president of Cigna Healthcare's U.S. government business, in a recent news release. “We are pleased to move beyond industrywide legal disputes related to past risk adjustment practices, and we look forward to continuing to provide high-quality, affordable Medicare Advantage coverage to our customers and delivering value to the taxpayers in the years ahead.”

With CMS’ final rule issued in January this year, the agency has implemented stricter auditing standards for Medicare Advantage plans and with the new audit methodology estimates $4.7 billion in overpayments to MA plans may be recovered in the coming decade.

Editor’s note: To read Becker’s Payer Issues’ coverage of this story, click here. To read the U.S. Attorney’s Office press release, click here.