OIG: Cigna Should Refund Feds $5.9M for Medicare Advantage Overpayments

January 05, 2023 - In its analysis of Cigna-HealthSpring of Tennessee’s risk adjustment program payments, the Office of Inspector General (OIG) found that 195 of the 279 unique enrollee-years did not have medical records that supported the high-risk diagnoses, which resulted in substantial Medicare Advantage overpayments.

OIG analyzed 279 unique enrollee-years for high-risk diagnoses for which Cigna received payments in 2016 and 2017. An independent contractor combed through Cigna’s materials to assess whether the diagnoses were validated and, if not, to calculate the financial impact.

Payments for the high-risk diagnoses totaled $759,529. The agency used this sample to extrapolate potential overpayment to the two-year timeframe. According to the sample, OIG found that Cigna could have received at least $5.9 million in overpayments for certain diagnoses that are high risk.

OIG recommended that the payer refund the government $5.9 million. Additionally, the payer should refund the government for any overpayments it discovers outside of the study period. Third, OIG urged Cigna to improve its compliance protocols particularly for high-risk diagnosis codes.

The analysis covered payments received for patients with one of ten high risk diagnoses including acute stroke, heart attack, major depressive disorder, colon cancer, and other conditions.

The rate of incorrect diagnosis varied by condition. Most of the major depressive disorder and vascular claudication diagnoses were substantiated in the medical records (29 out of 30 and 27 out of 30, respectively).

However, the other eight conditions had high rates of unsubstantiated high-risk diagnoses. For example, 29 out of 30 acute heart attack diagnoses in the sample did not have the evidence to support the diagnoses. Additionally, 27 out of 30 breast and colon cancer diagnoses were inaccurate along with 25 out of 30 embolism and prostate cancer diagnoses.

The high rate of incorrect diagnoses in just one of these high-risk categories could result in serious overpayments from the federal government. Inaccurate diagnoses of lung cancer, for example, which had 23 incorrect diagnoses out of 30 diagnoses, may have resulted in over $167,700 in overpayments.

“Cigna did not concur with our recommendations and did not concur with our findings for 13 sampled enrollee-years which, according to Cigna, were supported by the diagnosis codes on the medical records,” OIG said. “Cigna did not directly agree or disagree with our findings for the remaining enrollee-years.  Cigna did not agree with our audit methodology, use of extrapolation, and standards for data accuracy, coding, and documentation requirements.”

The payer argued that OIG’s investigation did not assess payment accuracy, but rather targeted overpayment without accounting for underpayment. As a result, the payer argued, the study was biased.

In light of Cigna’s comments, the agency made some changes to its methodology and recommendations—namely, it reduced the inaccurate enrollee-years by six and dropped the amount of projected overpayments from $6.3 million to $5.9 million. However, all other recommendations remained constant.

The OIG report on Cigna-HealthSpring of Tennessee was the latest in a series of investigations that OIG will publish on Medicare Advantage diagnosis code accuracy.

OIG is not the only organization that has its eyes on Medicare Advantage plan overpayment trends. Urban Institute found that the structure of Medicare Advantage lends itself to overpayment. The research entity urged policymakers to comply with MedPAC recommendations.