Cigna Insurance must pay USD 172 million to settle lawsuit over Medicare Advantage plans
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The health insurance giant was accused of using an algorithm called “PxDx” to save money on some medical claims
After this Saturday, the US Department of Justice reported that health insurance giant Cigna had violated the False Claims Act, the company must pay approximately $172 million to settle federal lawsuits.
According to the regulatory entity's statement, Cigna filed between the years 2016 and 2021 inaccurate and false codes for Medicare Advantage, that is, charges with overcharges. According to Damian Williams, United States Attorney for the Southern District of New York, the insurance company knew that “the diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker,” he said.
In the evaluation of Cigna, it is alleged that the health insurance company used an algorithm called “PxDx” to save money on some medical claims, as well as reduce certain labor costs.
Although Cigna has tried to defend itself by claiming that this legal case is long-standing, as well as stating that it “avoided the uncertainty and additional expense" of what would be a longer problem, the health insurance company agreed sign an agreement for at least five years of corporate integrity with the office of the inspector general of the Department of Health and Human Services.
These agreements are primarily designed to promote compliance among companies of this nature with the requirements of the federal health program. Since according to Attorney Williams in the Cigna case “the reported diagnoses of serious and complex conditions were based solely on cursory home evaluations performed by providers who did not perform the necessary diagnostic testing and imaging,” he said.
In a report presented by Michael Granston, deputy attorney general of the Department of Justice, it was detailed that the plans offered to private companies approved by the Medicare Advantage health system are called “Part C” or “MA Plans”, used largely by older adults.
Therefore, the majority of beneficiaries with Medicare Advantage are financed by the federal government which is responsible for paying private insurers, it is estimated that the figure can reach $450 billion annually for health coverage.