Fraudulent coding led CMS to overpay Cigna $1.4B, Justice Department says

The U.S. Justice Department accused Cigna of using improper diagnostic codes to artificially inflate reimbursement for its Medicare Advantage plans by $1.4 billion in a lawsuit. 

The 64-page lawsuit, filed Aug. 4 in the U.S. District Court for the Southern District of New York, claimed that from 2012 until 2017, Cigna's HealthSpring unit, which runs Medicare plans, submitted false risk adjustment claims to CMS that led to improper reimbursement increases. The Justice Department accuses Cigna of submitting codes for conditions that its Medicare Advantage members didn't have, weren't recorded in medical records or weren't based on clinical data.

"Cigna-HealthSpring intentionally misrepresented these health conditions as part of a widespread scheme to coax CMS into paying a higher monthly capitated rate on behalf of Medicare beneficiaries enrolled in Cigna-HealthSpring's Medicare Advantage plans," the lawsuit alleges.

The claims are similar to the ones the Justice Department filed against Anthem in March, alleging the insurer submitted inaccurate codes from 2014 through early 2018 to obtain higher reimbursement for its Medicare Part C, or Medicare Advantage, plans.

In an emailed statement to Becker's, a Cigna spokesperson said, "We are proud of our industry-leading Medicare Advantage program and the manner in which we conduct our business. We will actively defend Cigna against unjustified allegations."

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