U.S. sues Cigna Corp for overcharging Medicare Advantage program

U.S. prosecutors in Manhattan said on Monday they filed a civil lawsuit against Cigna Corp (CI.N) accusing the health insurer of overcharging the government’s Medicare Advantage program by making it appear patients were more ill than they actually were.

Prosecutors said Connecticut-based Cigna obtained tens of millions of dollars in Medicare funds between 2012 and 2019 by submitting false diagnoses for patients in cases in which providers retained by the company had not conducted the necessary tests. Prosecutors did not specify how much money they were seeking in damages.

Medicare is a government health insurance program for people ages 65 and older.

“Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker,” Damian Williams, the top federal prosecutor in Manhattan, said in a statement.

Cigna in a statement said its Medicare Advantage program complied with government rules.

“We reject these allegations and will vigorously defend our Medicare Advantage business against them,” the statement said.

Medicare Advantage is a program in which private insurers provide coverage to patients who opt out of the traditional Medicare program. Cigna this month announced it would expand its Medicare Advantage Plan next year.

The Justice Department in 2020 sued Anthem Inc, accusing the insurer for not checking the accuracy of diagnosis codes when submitting them for reimbursement from Medicare Advantage between 2014 and 2018 because doing so would have reduced revenue. A judge ruled this month that Anthem must face the suit.

The two cases are among several Justice Department civil lawsuits against companies participating in Medicare Advantage.

Enrollment in Medicare Advantage has doubled since 2013 to about 28.7 million, or about 49% of all eligible Medicare beneficiaries, government watchdog MedPac said in July.