Cigna-HealthSpring Life & Health Insurance Company (“CIGNA”) earned poor marks for its administration of various Medicare Advantage contracts in compliance with Federal requirements in recent Department of Health & Human Services (“HHS”) Office of Inspector General (“OIG”) audits.
Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) makes monthly payments to MA organizations according to a system of risk adjustment that depends on the health status of each enrollee. Accordingly, MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of health care resources than to healthier enrollees, who would be expected to require fewer health care resources.
To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from their providers and submit these codes to CMS. Some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.
Separate audits of two contracts reviewed groups of high-risk diagnosis codes to determine if selected diagnosis codes that Cigna submitted to CMS for use in CMS’s risk adjustment program under the contracts complied with Federal requirements. The audits found poor compliance in both contract audits.
Contract H4513 Audit
According to an audit report made public in March, 2023, a Medicare Advantage compliance audit of the nine high-risk groups covered by the audit revealed most of the selected diagnosis codes that Cigna submitted to CMS for use in CMS’s risk adjustment program under Cigna’s Contract H4513 “did not comply with Federal requirements.”Specifically, for 200 of the 300 sampled enrollee-years, the medical records that Cigna provided did not support the diagnosis codes and resulted in $468,372 in overpayments. On the basis of the audit sample results, OIG estimated that Cigna received at least $6.24 million in overpayments for 2016 and 2017.
Based on these audit findings, OIG is recommending that Cigna:
- Refund to the Federal Government the $468,372 of overpayments;
- Identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before or after our audit period and refund any resulting overpayments to the Federal Government; and
- Continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnosis codes that are at high risk for being miscoded comply with Federal requirements and take the necessary steps to enhance those procedures.
OIG reports Cigna disagreed with OIG’s recommendations as well as:
- OIG’s findings for 6 sampled enrollee-years which, according to Cigna, were supported by the medical records;
- OIG’s audit methodology, use of extrapolation, and standards for data accuracy, coding, and documentation requirements; but
- Cigna did not directly agree or disagree with OIG’s findings for the remaining enrollee-years.
After reviewing Cigna’s comments and the additional information Cigna provided, OIG revised the number of enrollee-years in error from 201 to 200 for this final report.
After OIG issued its draft report, CMS updated regulations for audits in its risk adjustment program to specify that extrapolated overpayments could only be recouped beginning with the payment year 2018. Because the CIGNA audit period covered payment years 2016 and 2017, OIG subsequently revised its first recommendation to specify a refund of only the overpayments for the sampled enrollee-years but made no changes to its other recommendations. OIG says it followed a reasonable audit methodology and correctly applied applicable Federal requirements underlying the MA program.
OIG expressed similar findings and concerns in its audit report about an audit of the performance of Cigna-HealthSpring of Tennessee, Inc. (“Cigna-Tenn”) made public in December 2022.
The Cigna-Tenn audit focused on 10 groups of high-risk diagnosis codes. OIG sampled 279 unique enrollee-years with the high-risk diagnosis codes for which Cigna received higher payments for 2016 through 2017. OIG limited it’s review to the portions of the payments that were associated with these high-risk diagnosis codes, which totaled $759,529.
With respect to the 10 high-risk groups covered by the audit, OIG found most of the selected diagnosis codes that Cigna submitted to CMS for use in CMS’s risk adjustment program did not comply with Federal requirements. For 195 of the 279 sampled enrollee-years, the medical records that Cigna provided did not support the diagnosis codes and resulted in $509,194 in overpayments.
Based on the errors found, OIG also concluded Cigna’s policies and procedures to prevent, detect, and correct noncompliance with CMS’s program requirements, as mandated by Federal regulations, needed improvement. On the basis of the sample results, we OIG estimates that Cigna received at least $5.9 million in overpayments for 2016 and 2017.
OIG recommend that Cigna:
- Refund to the Federal Government the $5.9 million of estimated overpayments;
- Identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before and after our audit period and refund any resulting overpayments to the Federal Government; and
- Continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnosis codes that are at high risk for being miscoded comply with Federal requirements (when submitted to CMS for use in CMS’s risk adjustment program) and take the necessary steps to enhance those procedures.
As with the latest audit findings, Cigna-Tenn:
- Disputed OIG’s recommendations;
- OIG’s findings for 13 sampled enrollee-years which, according to Cigna, were supported by the diagnosis codes on the medical records.
- OIG’s audit methodology, use of extrapolation, and standards for data accuracy, coding, and documentation requirements; but
- Did not directly agree or disagree with our findings for the remaining enrollee-years.
After reviewing Cigna-Tenn’s comments and the additional information provided, OIG also revised the number of enrollee-years in error from 201 to 195 for this final report and reduced the amount of the recommended repayment to $5.9 million but made no change to its other recommendations.
We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
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About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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