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Audit (A-07-10-01082)

CIGNA Healthcare of Arizona, Inc. (Contract H0354), Submitted Many Diagnoses to the Centers for Medicare & Medicaid Services That Did Not Comply With Federal Requirements for Calendar Year 2007

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The diagnoses that CIGNA Healthcare of Arizona, Inc. (CIGNA), a Medicare Advantage organization, submitted to CMS for use in CMS's risk score calculations did not always comply with Federal requirements. We estimated that CIGNA received approximately $28.4 million in additional overpayments for calendar year (CY) 2007. For 60 of the 100 beneficiaries in our sample, the risk scores calculated using the diagnoses that CIGNA submitted were valid. The risk scores for the remaining 40 beneficiaries were invalid because the diagnoses were not supported for one or both of the following reasons: (1) the documentation did not support the associated diagnosis or (2) the diagnosis was unconfirmed.

CIGNA's policies and procedures were not effective for ensuring that the diagnoses it submitted to CMS complied with Federal requirements. CIGNA's contracts required providers to submit accurate claims that complied with all Medicare requirements, and CIGNA officials stated that they relied on providers to submit accurate diagnoses in their claims. However, providers often reported incorrect diagnoses as a result of data entry errors and reported diagnoses for conditions that did not exist at the time of beneficiaries' encounters.

As a result of these unsupported and unconfirmed diagnoses, CIGNA received $151,000 in overpayments from CMS. Based on our sample results, we estimated that CIGNA received approximately $28.4 million in additional overpayments for CY 2007. This amount represents our point estimate less the total error amount for our sampled beneficiaries. The confidence interval for this estimate has a lower limit of $20.7 million and an upper limit of $36.3 million.

We recommended the following: (1) CIGNA should refund to the Federal Government $151,000 in overpayments identified for the sampled beneficiaries, (2) CIGNA should work with CMS to determine the correct contract-level adjustment for the additional $28.4 million of projected overpayments, and (3) CIGNA should improve its current policies and procedures to ensure compliance with Federal requirements. CIGNA disagreed with our findings.

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