Cigna Reaches $172 Million Settlement Over False Claims Act Allegations

Insurance giant Cigna (NYSE: CI) has reached an agreement with the U.S. government over claims it overcharged the Medicare Advantage (MA) program by misrepresenting patients’ conditions.

As part of the agreement, Cigna will pay more than $172 million to the government and will also enter into a corporate integrity agreement with the U.S. Department of Health and Human Services Office of the Inspector General (OIG).

Among the allegations, the government said Cigna used vendors to do in-home assessments of its plan members, but the nurses failed to do the tests or imaging necessary to accurately diagnose serious conditions.


Afterward, Cigna billed Medicare using billing codes associated with conditions for these unconfirmed diagnoses to secure higher payments.

“For years, Cigna submitted to the government false and invalid diagnosis information for its Medicare Advantage plan members,” Damian Williams, U. S. attorney for the Southern District of New York, said in a statement. “The reported diagnoses of serious and complex conditions were based solely on cursory in-home assessments by providers who did not perform necessary diagnostic testing and imaging. Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker.”

Bloomfield, Connecticut-based Cigna is one of the largest health insurance companies in the country. It contracts with other organizations that offer certain services and products to Cigna plan participants.


Last year, the federal government filed a lawsuit against Cigna, claiming that the insurance company’s MA plans submitted inaccurate and untruthful codes between 2016 and 2021. By failing to delete or withdraw incorrect codes, the federal government sued Cigna for violating the False Claims Act.

During that time, Cigna ran a “chart review” program — going through medical records of Medicare beneficiaries in their plans. The company hired coders to find medical conditions and assign diagnosis codes, among other things.

Cigna allegedly used this process to add codes for conditions that providers hadn’t reported, aiming for more payments. The government also accused the company of failing to validate some codes

As part of the agreement, top executives and members of Cigna’s board must make certifications about the company’s compliance measures.

“These agreements fully resolve long-running legal matters enabling us to focus our resources on all those we serve and avoid the uncertainty and further expense of protracted litigation,” Chris DeRosa, president of Cigna Healthcare’s U.S. government business, said in a statement. “We are pleased to move beyond industry-wide 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.”

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