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Federal and State Prosecutors Target BUCAHs with Legal Action

2020 was a landmark year in healthcare – and not just because of Covid-19. Over the last 18 months, multiple government agencies have sought to hold big insurers accountable in the court system for their alleged wrongdoing.


On March 26th, 2020, the Department of Justice sued Anthem in the Southern District of New York, alleging that Anthem up-coded diagnoses submitted to the government to increase their reimbursement rate for Medicare Part C plans.

The lawsuit alleges that in addition to habitually up-coding claims for Medicare Advantage plans from 2014 through early 2018, Anthem also explicitly attested to CMS multiple times that their diagnosis codes were accurate. Unfortunately, investigators claim that "Anthem's actual practices … were in direct contravention of its promises and attestations to CMS."

Anthem was not the only BUCAH in the DOJ’s spotlight last year. On August 4th, 2020, the Justice Department filed another suit in the Southern District of New York, this time accusing Cigna of manipulating diagnostic codes to inflate Medicare Advantage plans’ reimbursement to Cigna by $1.4 billion over five years.

Investigators allege that from 2012 to 2017, Cigna’s HealthSpring business unit submitted billing codes for conditions that were never diagnosed. Indeed, the lawsuit explicitly alleges that Cigna’s inaccurate billing was part of a “widespread scheme to coax CMS into paying a higher monthly capitated rate on behalf of Medicare beneficiaries enrolled in Cigna-HealthSpring’s Medicare Advantage Plans”.

Even if the Department of Justice wins financial renumeration, it will likely amount to little more than a slap on the wrist: Anthem’s 2020 revenue exceeded $121,000,000,000, a ~17% increase from 2019.




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