Whistleblower lawsuit accuses Cigna of Medicare Advantage fraud


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.

Photo credit: zimmytws, Getty Images


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Justice Department accuses Anthem of Medicare fraud


A lawsuit filed by the Department of Justice against Anthem accuses the insurer of collection million of dollars by failing to delete inaccurate diagnosis codes for Medicare Advantage patients. The suit was filed on Friday by Geoffrey Berman, United States Attorney for the Southern District of New York.

The case alleges that Anthem falsely certified the accuracy of the diagnostic data it sent to the Centers for Medicare and Medicaid Services, causing CMS to calculate risk-adjustment payments to the insurer based on inflated diagnosis information. For example, Anthem submitted an ICD-9 diagnosis code for active lung cancer for one patient, but its chart review program did not substantiate the diagnosis, according to court documents.

Anthem implemented a retrospective chart review program using a vendor called Medi-Connect, according to the lawsuit. The insurer reportedly paid Medi-Connect to connect medical records from healthcare providers and review them to identify diagnostic codes supported by the medical records.

According to court documents, from 2014 to 2018, Anthem allegedly used the chart review program to find additional codes to submit to CMS while failing to identify and delete inaccurate codes. The chart review program brought in more than $100 million in revenue per year for Anthem, according to the complaint.

“The integrity of Medicare’s payment system is critical to our healthcare,” Berman said in a news release. “This office is dedicated to vigorously using all of the legal tools available, including the False Claims Act, to ensure the integrity of Medicare payments.  The case against Anthem today is an illustration of that commitment.”

Anthem said it was confident its health plans complied with regulations, and that it would vigorously defend its risk adjustment practices.

“This litigation is the latest in a series of investigations on Medicare Advantage plans. The government is trying to hold Anthem and other Medicare Advantage plans to payment standards that CMS does not apply to original Medicare, and those inconsistent standards violate the law,” the company wrote in an emailed statement. “The suit is another in a pattern that attempts to hold Anthem and other plans to a standard on risk adjustment practices, without providing clear guidance. Where regulations have not been clear, Anthem has been transparent with CMS about its business practices and good faith efforts to comply with program rules.”

Photo credit: zimmytws, Getty Images


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Whistleblower alleges Medicare fraud at iconic Seattle-based health plan


Group Health Cooperative in Seattle, one of the nation’s oldest and most respected nonprofit health insurance plans, is accused of bilking Medicare out of millions of dollars in a federal whistleblower case.

Teresa Ross, a former medical billing manager at the insurer, alleges that it sought to reverse financial losses in 2010 by claiming some patients were sicker than they were, or by billing for medical conditions that patients didn’t actually have. As a result, the insurer retroactively collected an estimated $8 million from Medicare for 2010 services, according to the suit.

Ross filed suit in federal court in Buffalo, N.Y., in 2012, but it remained under a court seal until July and is in the initial stages. The suit also names as defendants two medical coding consultants, consulting firm DxID of East Rochester, N.Y., and Independent Health Association, an affiliated health plan in Buffalo, N.Y. All denied wrongdoing in separate court motions filed late Wednesday to dismiss the suit.

The Justice Department has thus far declined to take over the case, but said in a June 21 court filing that “an active investigation is ongoing.”

The whistleblower suit is one of at least 18 such cases documented by KHN that accuse Medicare Advantage managed-care plans of ripping off the government by exaggerating how sick its patients were. The whistleblower cases have emerged as a primary tool for clawing back overpayments. While many of the cases are pending in courts, five have recovered a total of nearly $360 million.

“The fraudulent practices described in this complaint are a product of the belief, common among MA organizations, that the law can be violated without meaningful consequence,” Ross alleges.

Medicare Advantage plans are a privately run alternative to traditional Medicare that often offer extra benefits such as dental and vision coverage, but limit choice of medical providers. They have exploded in popularity in recent years, enrolling more than 22 million people, just over 1 in 3 of those eligible for Medicare.

Word of another whistleblower alleging Medicare Advantage billing fraud comes as the White House is pushing to expand enrollment in the plans. On Oct. 3, President Donald Trump issued an executive order that permits the plans to offer a range of new benefits to attract patients. One, for instance, is partly covering the cost of Apple Watches as an inducement.

Group Health opened for business more than seven decades ago and was among the first managed-care plans to contract with Medicare. Formed by a coalition of unions, farmers and local activists, the HMO grew from just a few hundred families to more than 600,000 patients before its members agreed to join California-based Kaiser Permanente. That happened in early 2017, and the plan is now called Kaiser Foundation Health Plan of Washington. (Kaiser Health News is not affiliated with Kaiser Permanente.)

In an emailed statement, a Kaiser Permanente spokesperson said: “We believe that Group Health complied with the law by submitting its data in good faith, relying on the recommendations of the vendor as well as communications with the federal government, which has not intervened in the case at this time.”

Ross nods to the plan’s history, saying it has “traditionally catered to the public interest, often highlighting its efforts to support low-income patients and provide affordable, quality care.”

The insurer’s Medicare Advantage plans “have also traditionally been well regarded, receiving accolades from industry groups and Medicare itself,” according to the suit.

But Ross, who worked at Group Health for more than 14 years in jobs involving billing and coding, said that from 2008 through 2010 GHC “went from an operating income of almost $57 million to an operating loss of $60 million. Ross said the losses were “due largely to poor business decisions by company management.”

The lawsuit alleges that the insurer manipulated a Medicare billing formula known as a risk score. The formula is supposed to pay health plans higher rates for sicker patients, but Medicare estimates that overpayments triggered by inflated risk scores have cost taxpayers $30 billion over the past three years alone.

According to Ross, a GHC executive attended a meeting of the Alliance of Community Health Plans in 2011 where he heard from a colleague at Independent Health about an “exciting opportunity” to increase risk scores and revenue. The colleague said Independent Health “had made a lot of money” using its consulting company, which specializes in combing patient charts to find overlooked diseases that health plans can bill for retroactively.

In November 2011, Group Health hired the East Rochester firm DxID to review medical charts for 2010. The review resulted in $12 million in new claims, according to the suit. Under the deal, DxID took a percentage of the claims revenue it generated, which came to about $1.5 million that year, the suit says.

Ross said she and a doctor who later reviewed the charts found “systematic” problems with the firm’s coding practices. In one case, the plan billed for “major depression” in a patient described by his doctor as having an “amazingly sunny disposition.” Overall, about three-quarters of its claims for higher charges in 2010 were not justified, according to the suit. Ross estimated that the consultants submitted some $35 million in new claims to Medicare on behalf of GHC for 2010 and 2011.

In its motion to dismiss Ross’ case, GHC called the matter a “difference of opinion between her allegedly ‘conservative’ method for evaluating the underlying documentation for certain medical conditions and her perception of an ‘aggressive’ approach taken by Defendants.”

Independent Health and the DxID consultants took a similar position in their court motion, arguing that Ross “seeks to manufacture a fraud case out of an honest disagreement about the meaning and applicability of unclear, complex, and often conflicting industry-wide coding criteria.”

In a statement, Independent Health spokesman Frank Sava added: “We believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately.

Whistleblowers sue on behalf of the federal government and can share in any money recovered. Typically, the cases remain under a court seal for years while the Justice Department investigates.

Photo: Feodora Chiosea, Getty Images

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.


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Pinpointing patterns in opioid abuse and using data to fight fraud


As the opioid crisis continues to worsen, claiming the lives of more than 130 people each day in the U.S., the healthcare industry needs to dig deep in order to determine the role that prescription medications play. After all, about 80 percent of people who use heroin first misused prescription opioids.

Currently no one solution exists that can effectively address the entirety of the opioid crisis. It will take unprecedented collaboration across industry stakeholders if we are to manage and slow this epidemic both now and in the future. Big data and analytics can help tackle the challenge by identifying and evaluating entities who contribute to potential risk, or who are themselves at-risk, within the various points of the healthcare ecosystem.

A critical lens that is often missed is the need to analyze data from traditional health sources and combine this information together with non-medical sources of data from public records. Public records provide insights into at-risk entities, behaviors, and connections – offering a unique view of individuals as they engage throughout the healthcare system. Outputs of this risk evaluation provide astounding insights otherwise unavailable when dealing only with healthcare or non-healthcare data separately: they identify social groups and other “networks” of schemers who work together to perpetuate the dangerous cycle of drug availability and abuse. An analysis of each data set by itself is simply not comprehensive enough to reveal the entire spectrum of opioid abuse patterns: lacking the relationship component that drives all diversion tactics.

Relationships and risks
Relationships are the foundation on which our communities are built, driving people’s behaviors, dependencies and, unfortunately, schemes. According to the Centers for Disease Control and Prevention, drug diversion – the transference of legally controlled and prescribed substances from one individual to another – is the number one avenue for opioid abuse. By uncovering relationships, associations, and affiliations among providers, patients, and pharmacies, healthcare stakeholders can identify players who contribute to risks or who are at personal risk of prescription drug abuse and fraud. These individuals may be behaving either intentionally or inadvertently, but nonetheless warrant further evaluation.

Patients, or health plan members, are the most at-risk group in fraudulent schemes and this group includes individuals who are new to taking opioid-type medications, or the opioid naive. Patients who receive multiple opioid prescriptions are also placed at greater risk due to the cumulative effect that these medications have. Other risky patients include those who may be intentionally abusing prescriptions, partaking in recreational drug use, or reselling drugs on the black market.

Prescribers are another source of potential risk due to unknowing, irresponsible, or fraudulent prescribing behaviors. Writing prescriptions to friends and family members is an immediate red flag, as is prescribing excessive quantities of certain drug types across many patients. Physicians may also unknowingly prescribe lower quantities to high-risk patients, ultimately putting these individuals at-risk.

Pharmacies are a third source of potential risk as fraudsters can target them with counterfeit scripts, or, when they lack sufficiently robust patient and provider screening, become targeted as easy-to-fill locations. By serving high volumes of patients who seek a certain type of substances or by filling prescriptions not associated with a corresponding medical condition, pharmacies become inadvertent participants in the propagation of fraudulent schemes.

Uncovering patterns in big data
However, intelligence isn’t lacking on these risk-prone players. There is a massive amount of transactional information about patients, providers, and pharmacies and their respective roles in the opioid epidemic. By analyzing large quantities of prescription data, in combination with public records data, stakeholders have an opportunity to detect which providers are engaged in high-dose script writing, instances where opioids are being prescribed to large social or family groups, and when prescribing has occurred to patients with a high-risk for potential abuse, among others.

Coupled with analytics, this transaction data can also surface situations where a large number of prescription seeking patients for a particular pharmacy originate from a single physician, or even where prescriptions are written without a corresponding doctor or hospital visit. Data can reveal “frequent flyers” or “doctor shoppers,” patients who go to one or multiple providers for high-risk drugs within a short period of time.

Patients seen exhibiting this behavior are likely supporting a drug habit or seeking to divert drugs. Since they typically act quickly and pay with cash, they can be tough to catch without a supporting technology that tracks—and flags—suspicious steps. Proper identity resolution forms the foundation of this process: it is critical to identify the correct individual even when he or she uses an identity variation. For example, many systems will fail to catch that Richard Grape, Ricky Grape, and Rick Grape with slightly altered inputs are all the same person; an error that could result in the receipt of additional prescriptions.

Visualization, an important tool in the big data and analytics arsenal, can help stakeholders quickly see relationships that identify interconnected entities and allows them to focus on the social groups of interest. These networks of entities who work together to drive widespread drug diversion, may exist completely outside of the scope of healthcare data. Relationships may include family members, associates, colleagues, roommates, members of social organizations, joint owners, and businesses that individuals frequent, to name but a few. When public record insights are coupled with healthcare interactions, patterns quickly emerge identifying entities and clusters of potential risk and abuse.

Once these at-risk or high-risk entities are confirmed, healthcare stakeholders can bring these insights together in order to mitigate drug diversion and non-medical opioid use throughout the ecosystems’ various workflows. Consider the value of answering the following questions about a patient within an identified social network:

  • Is she part of a social group whose members are trending toward excessive total Morphine Equivalent Dose (MED) calculations? – Tracking daily patient MED totals can help identify individuals who are potentially at risk for overdose, abuse, or diversion.
  • Is he receiving multiple prescriptions that cause him to exceed the daily safe MED?
  • Is she within the network of a patient receiving the same drug type?
  • Is he receiving prescriptions from a provider within his social network?
  • Is she filling a script from a prescriber that services high-risk patients?
  • Is he receiving multiple prescriptions within a short timeframe?
  • Is she part of an upward trending high-risk social group?

In cases where answers to these questions merit further investigation, it is often determined that the social networks involved are working with pill mills to acquire opioids for non-medical reasons. Pill mill behaviors typically involve providers, clinics, and pharmacies that fill specific high-risk prescriptions frequently and without proper due diligence. Through healthcare claims and public records data, the stakeholders who need access to at-risk or high-risk intelligence can gain significant visibility into the key offenders and potential collateral of excessive prescribing.

It’s important to note that these data insights surface not only knowing participants, but may include prescribers and pharmacies who are inadvertently participating in pill mill activities. These entities can be targeted by large networks of collaborating patients who have organized together to obtain large quantities of appropriately dispensed high-risk drugs. Identifying these instances provides opportunities for education as well as further screening.

Scoring and sharing
As we begin to work together and fight the opioid epidemic, it is critical to identify and evaluate those at-risk and those who are sources of risk, regardless of which doctor, pharmacy, provider, or health plan had identified them first. Each party can benefit from one another’s lessons learned during historical and ongoing interactions. It is only through collaboration that stakeholders can share insights to detect and prevent risk at an industry level.

Imagine a future state in which every healthcare stakeholder would immediately benefit from the collective intelligence of their peers and counterparts, using this information to prevent, detect, and mitigate further behaviors that threaten patient health and industry integrity. By securing and sharing insights, we will not only reduce the unknown risks, but also increase our potential to overcome this crisis.


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