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Whistleblower lawsuit accuses Cigna of Medicare Advantage fraud

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A whistleblower lawsuit accuses Cigna of receiving “billions” in overpayments for its Medicare Advantage plans. The amended complaint, filed by the Department of Justice in the U.S. District Court for the Southern District of New York a year ago, was unsealed on Wednesday.

A former service provider for Cigna’s Medicare Advantage subsidiary alleged that the company sent providers to patients’ homes to conduct a health assessment, which was then improperly submitted to the Centers for Medicare and Medicaid Services for risk adjustment. The whistleblower was a former officer for Texas Health Management, a now-defunct company that worked with Cigna-Healthspring between 2012 and 2017.

Cigna acquired HealthSpring in 2012, and currently offers Medicare Advantage plans in 17 states under this brand.

Commercial insurers who offer Medicare Advantage plans receive a monthly capitated rate from CMS for each of their covered members, which they use to cover the cost of care. For older and sicker patients — who have higher risk scores — they receive a higher rate.

A patient’s risk score is based on diagnoses assigned to the patient in the prior year. To be submitted, a patient must have had a face-to-face encounter with a provider, and the patient must be cared for or assessed.

According to the plaintiff, Cigna ran an assessment program that sent nurses and nurse-practitioners to patients’ homes, where they were expected to see 35 patients per week and generate 20 or more diagnoses per visit. They were reportedly not allowed to provide care, prescribe medications or make referrals to specialists.

The complaint described the program as “…a  data-gathering exercise used to improperly record lucrative diagnoses to fraudulently raise risk cores and increase payments from CMS.”

According to court documents, Cigna-HealthSpring used analytics to sort members into different priority categories based on their medical histories. The company also reportedly sought to recruit primary care physicians to complete the assessments, at one point offering a $150 bonus per completed exam to provider who performed a certain volume of assessments each year

The Department of Justice decided not to intervene in the case in February. Specifically, the government declined to claim that Cigna violated the False Claims Act by conducting nurse home visits that did not involve providing medical treatment.

Cigna did not respond to requests for comment at the time of publication.

This isn’t the first time a Medicare Advantage plan has come under scrutiny for payments.

Last year, the Office of Inspector General reviewed “billions” in estimated Medicare Advantage payments that raised concerns. Looking at 2016 encounter data, the OIG found that Medicare Advantage Organizations almost always used chart reviews to add diagnoses, and that diagnoses reported only on chart reviews — without any service records — resulted in roughly $6.7 billion in risk-adjusted payments for 2017.

Of that, an estimated $2.7 billion in payments were based on diagnoses that did not link to a specific service provided to the member.

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CMS expands telehealth options for Medicare Advantage plans

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The Centers for Medicare and Medicaid Services (CMS) will allow Medicare Advantage plans to cover a wider range of telehealth services. The new rule would give Medicare Advantage plans the flexibility to count certain telehealth specialists toward network adequacy requirements, including dermatology, psychiatry, cardiology, and primary care.

The agency said the changes were designed to encourage plans to give members access to telehealth and increase plan choice for those living in rural areas. It’s one of many steps the agency has taken, particularly in light of the Covid-19 pandemic, to cover more telehealth services for Medicare patients.

“CMS’s rapid changes to telehealth are a godsend to patients and providers and allows people to be treated in the safety of their home,” CMS Administrator Seema Verma said in a news release. “The changes we are making will help make telehealth more widely available in Medicare Advantage and are part of larger efforts to advance telehealth.”

The new rules also slightly ease network standards for plans in rural areas. Instead of requiring 90% of members to live within a certain time and distance of a provider, CMS decreased that requirement to 85% to encourage more plan options.

In the final rule, published in the Federal Register on Friday, CMS said it had tried to strike a balance between encouraging access to telehealth services while still ensuring patients could access specialists in-person.

“While health plans clearly favored taking into account telehealth access while evaluating network adequacy, providers had more concerns that telehealth services could be used to replace, rather than supplement, in-person healthcare delivery,” the rule stated. “We explained that it is important and appropriate to account for contracted telehealth providers in evaluating network adequacy consistent with reflecting how MA plans supplement, but do not replace, their in-person networks with telehealth providers.”

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Cigna’s new Medicare Advantage chief talks about growth plans, Covid-19

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Shortly before the first Covid-19 outbreak was reported in the U.S., Gina Conflitti stepped into her new role as chief medical officer for Cigna’s Medicare Advantage plans. Now, during a pandemic in which older Americans face a higher risk, Conflitti will help lead the company’s efforts to respond in stride.

Conflitti joined Cigna in January, after serving as CMO for Aetna’s national accounts for 12 years. A licensed physician, she practiced as an internist before working in management.

In a phone interview from her home in Arizona, Conflitti shared her plans for Cigna’s Medicare Advantage plans and what that looks like in the midst of the Covid-19 pandemic.

“This is an unprecedented time. Our seniors are a segment of the American population who are very much as risk,” she said.

Cigna currently offers Medicare Advantage plans in 18 states. The company added plans in more than 40 counties last fall, as well as pilot programs for transportation to doctor’s appointments, grocery stores and places of worship in some of its plans. Though it has a smaller Medicare Advantage market share than some of its competitors, Cigna expects to see its MA customers increase between 13% and 16% this year, it said in its annual earnings.

Now, in light of the quickly-spreading Covid-19 cases in the U.S., Cigna is taking another look at its Medicare Advantage plans. The company, along with its competitors, has waived all costs related to testing for Covid-19. Cigna’s pharmacy benefit manager, Express Scripts, is also delivering three-month supplies of medications.

Cigna is also looking at new guidance from the Centers for Medicare and Medicaid Services (CMS), which significantly broadened access to telehealth. Prior to CMS’ new guidance, telehealth was limited to members in rural locations. Now, Medicare patients in all locations have access to in-home appointments.

“Telehealth is sort of front-and-center right now. … It won’t replace in-person medical exams. But there are certain situations, much like today, where virtual visits will give seniors access to care from their homes,” Conflitti said. “I commend CMS for their (telehealth) expansion efforts in order to mitigate the risk of exposure.”

She said Cigna would follow further CMS guidance on removing barriers to care in light of Covid-19, and was looking into other opportunities to help their members.

“We are definitely on regular calls within the company. Our leadership is speaking with other organizations and businesses in the U.S. and globally to address all aspects of this crisis,” she said.

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Health2047 spins out Medicare Advantage company Zing Health

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Healthcare innovation company Health2047 has spun out Zing Health, a tech-enabled Medicare Advantage plan meant for those traditionally underserved by existing healthcare plans.

Menlo Park, California-based Health2047 works to commercialize healthcare technology in partnership with the American Medical Association to make progress on issues including data interoperability, chronic disease management and value-based payments.

Zing Health will build out its presence in the Midwest and focus on elevating the patient-provider relationship to help address social barriers to care have huge impacts on patient health outcomes. The company plans to launch in Cook County with coverage starting in 2020.

Patients will have access to a local field care team that has an on-the-ground understanding of the community landscape and can collaborate on patient care with physicians and hospitals. The information gleaned from these relationships can be used on larger population health initiatives.

The company plans to embed staffers at local hospitals to help ensure patients are getting appropriate care in a timely manner.

Zing Health was co-founded by Health2047, TWG Partners Founder Dr. Eric Whitaker and Harthaven Capital Founding Partner Dr. Ken Alleyne.

Some of the benefits touted by the health plan include its ability to be customized to individual member needs, a broad over-the-counter formulary and easing patient access to care at nontraditional sites like federally qualified health centers.

“We are building a program that is affordable, accessible and repeatable anywhere in the United States,” Zing Health CEO Eric Whitaker said in a statement.

“We will co-locate care teams with community partners to collect real-time, on-the-ground data about our members and help them achieve their best health possible by ensuring they can access convenient, comprehensive care.”

Zing Health is the third spinout from Health2047, which was co-founded by the AMA and has raised more than $40 million in funding from investors. Two other companies were launched by Health2047 last year.

The first was Akiri, a San Francisco-based startup building a subscription-based data network to enable the use and transfer of health information.

First Mile Health was the second spinout and is focused on connecting people with prediabetes with health coaches and appropriate programs to change their behavior.

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CMS OKs Livongo as enrolled provider for Medicare Advantage

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The Centers for Medicare and Medicaid Services has approved Livongo as an enrolled provider for Medicare Advantage members, the company announced in a press release.

Beginning next month, the Livongo for Diabetes program will be available to Medicare Advantage members of Cambia Health Solutions’ regional health plans. Cambia is a nonprofit healthcare company headquartered in Portland, Oregon.

Cambia and Livongo teamed up last year when they announced they would make Livongo’s diabetes solution available to Regence Blue Cross and Blue Shield members in Idaho, Utah, Washington and Oregon. At the time, they also revealed plans to develop other solutions for conditions like hypertension and behavioral health.

The two organizations also have another connection. One of Livongo’s investors, Echo Health Ventures, was created by Cambia and Mosaic Health Solutions, the investment arm of Blue Cross and Blue Shield of North Carolina.

“Livongo’s CMS enrollment is another great step in our co-development partnership, and the Cambia team is excited for our regional health plans to expand these offerings to the Medicare Advantage population,” Cambia Health Solutions senior vice president of health care services and CMO Cheryl Pegus said in a statement. “Consumer-focused solutions for our members and their families encourage their well-being and highlight our integrative capabilities to simplify the member journey.”

Headquartered in Mountain View, California, Livongo’s platform offers users personalized insight and prompts them to take action when it’s likely to have a clinical impact. Individuals can also use it to connect to support and coaches. Recently, Livongo joined forces with Amazon to release a HIPAA-compliant Alexa skill, which lets patients keep track of their blood sugar checks and get insights and personalized health nudges.

Over time, the chronic disease management company has expanded its reach. It started off with a focus on diabetes and has since broadened its approach to include hypertension, weight management and behavioral health as well.

In March, the Wall Street Journal reported Livongo is planning for an initial public offering as early as the third quarter of 2019.

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Clover Health raises massive $500M round in exploding Medicare Advantage space

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Investors are hungry to support startups looking to challenge incumbent health plans in the red-hot Medicare Advantage space

The latest example is San Francisco-based company Clover Health raising another $500 million led by existing investor Greenoaks Capital, even after a series of missteps a few years back that culminated in co-founder and former CTO Kris Gale stepping down from his role.

The new funding amount was initially reported by TechCrunch  and independently verified by MedCity News.

As part of the financing, Clover Health CTO Andrew Toy has been promoted to the position of CTO and president and now sits on the company’s board of directors.

Clover Health – like its rivals in the space – has pursued a narrow network strategy that focuses on partnerships with a select group of providers and the development of a strong data infrastructure to more effectively and efficiently route care.

Clover CEO Vivek Garipalli touted the company’s 35 percent membership growth over the past year as well as well as their machine learning models which has an 85 percent accuracy in identifying members at risk of hospitalization in the next 28 days, in a blog announcing the new funding round.

Last year, the company launched an in-home primary care service informed by genomic testing that is meant to take care of their highest risk (and most expensive) members.

Clover Health was originally founded in 2012 and has raised around $925 million from investors including Google Ventures, Sequoia Capital and First Round Capital. Their last $130 million Series D financing round valued the company at $1.2 billion.

Over that time, however, a number of well-capitalized upstarts have entered the space including Devoted Health and Bright Health, both of which have raised more than $300 million from investors.

Another insuretech company, New York-based Oscar Health received a $375 million investment from Google parent company Alphabet last year to help them enter the Medicare Advantage market.

Business interest in Medicare Advantage has been booming, driven by the demographic reality of the country’s aging population.

Medicare Advantage enrollment in 2018 topped 20 million and has continued to increase year-over-year. What’s more is that the sheer number of options available to beneficiaries have also been exploding, with around 3,700 Medicare Advantage plan choices in 2019.

By 2025, Medicare Advantage is projected to grow to more than $500 billion in annual revenue and more than 38 million members.

It’s not only startups that see the value in picking up that expanding market share. Traditional health plans like Cigna, UnitedHealthcare and Aetna have seen Medicare Advantage as major potential growth avenues.

The largest player in the space, insurer UnitedHealthcare has nearly 5 million Medicare Advantage enrollees.

Clover, by contrast, has only around 40,000 members across New Jersey, Arizona, Pennsylvania, South Carolina, Texas, Tennessee and Georgia.

The gap between those numbers comes with a nod to the difficulty of being an upstart payer organization and an acknowledgement that in order to find success Clover needs to be in the business for the long-haul.

“The Medicare Advantage space, however, is not easy – there are enormous barriers to entry,” Garipalli wrote in his blog post.

“Clover is committed to taking a long-term view – decades long  – because we know healthcare is not for the faint of heart. This kind of determination is essential for making fundamental, positive change for patients.”

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