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To Beat Overbilling Allegations, Cigna Says Everybody Does It

Cigna has told a Tennessee federal judge that the U.S. Department of Justice's False Claims Act lawsuit accusing it of defrauding Medicare Advantage by exaggerating diagnoses is merely challenging an "industry-wide practice."

In a motion to dismiss filed on Friday, Cigna sought to end a DOJ lawsuit — originally launched by a whistleblower in 2017 — by insisting that there's an "obvious alternative explanation" for why its billing relied on home health professionals who didn't perform or order testing that is needed to reliably diagnose complex conditions.

"The obvious alternative explanation is that these were not first-time diagnoses made without diagnostic equipment," Cigna's lawyers argued. "Rather, based on patient self-reporting and review of patients' medical histories and medications, the clinicians — exercising their professional medical skill and judgment — were making entirely proper diagnoses of conditions like diabetes and congestive heart failure that were already being treated or managed at the time of the in-home exam."

Government lawyers should have actually known this before joining the lawsuit, Cigna said.

"This is an industry-wide practice that [Centers for Medicare & Medicaid Services] has known about — and expressly permitted — for years," the company said in the filing.

Cigna added that this reality sinks any argument that the case meets the standards established by the U.S. Supreme Court's landmark Escobar decision in 2016, which outlines a test for whether regulatory violations are considered "material" under the FCA.

The lawsuit focuses on whether a division called Cigna-HealthSpring bilked Medicare Advantage with the company's "360 Program," in which contracted nurses performed health examinations inside patients' homes and allegedly diagnosed policyholders with exaggerated medical problems. In its complaint, the DOJ accused Cigna of obtaining "tens of millions of dollars in risk adjustment payments" for relatively high-cost patients based on "tens of thousands of instances" of unreliable diagnoses.

"The government … alleges that Cigna 'omitted important details' about the revenue the program generated and vendors' lack of treatment or diagnostic testing during in-home exams," Cigna noted in Friday's filing.

But, according to Cigna, nothing about that was kept secret from the federal agency that runs the Medicare program.

"Even if that is true, CMS identified all of those purported details in its public statements in 2013 and 2014," the company says in the filing. "Since 2014, moreover, CMS has known precisely which diagnoses — including the 'serious, complex conditions' at issue — were being reported from in-home exams."

Representatives for both the company and the federal government did not return requests for comment on Monday.

The government is represented by Damian Williams and Peter Aronoff of the U.S. Attorney's Office for the Southern District of New York, and Mark H. Wildasin and Kara F. Sweet of the U.S. Attorney's Office for the Middle District of Tennessee.

Cigna is represented by David W. Ogden, Howard M. Shapiro, Charles C. Speth and Kevin Lamb of WilmerHale and Thomas K. Potter III of Burr & Forman LLP.

The case is U.S. v. Cigna Corp. et al., case number 3:21-cv-00748, in the U.S. District Court for the Middle District of Tennessee.

--Additional reporting by Adam Lidgett, Lauren Berg and Jeff Overley. Editing by Steven Edelstone.

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1 Comment

Does it make it right just because everyone does it? I don’t think so. One would think a company the size of Cigna could come up with a better excuse. Removal from the program for 2 yrs and a fine totally the estimated overcharges plus interest would be justified. Making an example of one company may help the others doing this get their act together. If the other insurers keep doing the same thing then proceed with the same punishment. If anything else is found later where the taxpayer is paying more than what they should be then the offender should be barred from Federal programs.

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