Insurance Fraud Is To Blame for Draining Medicaid Funds

Recently the DOJ pressed charges against Cigna for Medicare fraud. A whistleblower (a contracted lawyer) raised attention to a Cigna program where third-party providers (often nurse practitioners) were conducting in-home screenings for patients with Cigna. The codes that that practitioners used to record the appointment indicated serious and/or several conditions, yet these treatment plans weren’t being followed up on with any more care (such as medication, diagnostic screening, ordering more tests, etc). By making patients look sicker than they are, Cigna increased profits by thousands of dollars per patient each year. They did this by taking advantage of Medicare’s attempt to de-incentivize insurers from cherry picking only healthy patients.

Medicare aimed to compensate insurers for taking sick patients. "Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker," U.S. Attorney Damian Williams said in the announcement. "This Office is dedicated to holding insurers accountable if they seek to manipulate the system and boost their profits by submitting false information to the Government.” (Fierce Healthcare)

This fraudulent billing has been ongoing and racking up significant profits for Cigna. The image above is courtesy of AARP. One vendor conducted 6,658 in-home visits in the first nine months of 2014, which generated $14 million in payments from CMS, DOJ said. In 2017, Medicare paid out $2.6 billion in 2017 for diagnoses related only to these home visits. These numbers reflect what is actually prosecutable for Cigna by this one specific scheme, reality is that all the insurance companies are running multiple similar scams. This fraud weighing down the Medicare system is stealing taxpayer money. Taxpayers who already see overpriced insurance come out of their paychecks, taxpayers who have almost no choice in their insurance plans, and often receive poor coverage when there is a medical need that insurance is supposed to cover. 

Cigna is far from the only one taking advantage of the same Medicare incentives. If one company is doing it, most of the competitors are likely to be running a similar play. Since 2020, the DOJ has seen two very similar lawsuits from Kaiser Permanente and Elevance (basically Blue Cross Blue Shield/Anthem). The amount of fraud is in the open, yet the DOJ struggles to find the resources to investigate and pursue the majority of similar cases that overtly steal taxpayer money.