Cigna is Committing Fraud to Increase Profits, Allegedly

Bills were delivered to patients demanding payments to fake companies that went to Cigna.

Introduction

Today we are going to discuss Cigna Healthcare and its fraudulent practice of billing patients through medical providers that don’t really exist, but are just a front for Cigna itself. Attorneys at Motley Rice and Izard Kindall & Raabe filed an Employee Retirement Income Security Act of 1974 putative class action against Cigna Health and Life Insurance Co. in Connecticut District Court, alleging the insurer is overcharging for medical services.

The Problem

Patients are obtaining covered medical care from approved providers, and then receiving bills from fake companies for the same services rendered. We uncovered an article on law.com detailing the complaint and with a copy of the actual filed suit. They give this example:

“Arizona citizen Aubrey Srednicki, the named plaintiff, has a health care plan that claims Cigna negotiates lower rates with in-network providers to help those insured with Cigna to save money, the complaint said.

However, the plaintiffs allege that Cigna has participated in a 'fraudulent scheme,' and the proposed class members did not save money, and were overcharged for medical services.

The complaint lays out an example where Srednicki obtained a blood test from an in-network provider, Laboratory Corporation of American Holdings, or LabCorp, and allegedly discovered the uninsured cash price was significantly less than what she paid.

The cash price for an uninsured customer at LabCorp was allegedly $449.

Cigna claimed it had provided a discount of $14,572.66 on the Explanation of Benefits, and the plan covered $471.02 of the $2,787 covered amount, the complaint said. This left Srednicki with the responsibility to pay $2,315. 98 in deductible and coinsurance payments.

‘Cigna did not disclose to plaintiff Srednicki in its billing materials the fact that Lab Corp. had been paid in full nor did it disclose that, in fact, there was no 'balance' to bill plaintiff Srednicki,’ the complaint said.

In addition, the plaintiffs allege that ‘HLTH DIAG LAB' is a doing-business-as pseudonym for Cigna-affiliate Cigna Healthcare of Arizona, Inc.,’ to create a fake invoice, the complaint said.

‘These fictitious amounts were then included on a fraudulent invoice, prepared by Cigna Medical Group, and sent through interstate mail to plaintiff Srednicki and demanding a fraudulent payment to Cigna Medical Group in the amount of $2,315.98,’ the complaint said.

The plaintiffs further claim the defendant is a fiduciary of all the class members' plans under the Employee Retirement income Security Act, the complaint said.

‘Defendant breached the terms of the ERISA Plans and legal obligations, committed breaches of fiduciary duty and prohibited transactions, and harmed plaintiff and class members,’ the complaint said.

A representative for Cigna did not immediately respond to a request for comment. No attorney had entered an appearance for the defense by press time.

Go take a look at the complaint on the law.com site and judge for yourself.

The Solution

The solution is to put health insurance companies out of business. You don’t want bankers running anything; they crash the economy every ten years on average, and it doesn’t have to be that way. Yes, bankers are running insurance companies. The Commonwealth Fund, whose mission is “to promote a high-performing, equitable health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including people of color, people with low income, and those who are uninsured,” identified several problems in their paper “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” That basically boiled down to

• Health insurance is too expensive

• Patient education is largely ignored

If we can address these two problems, we can fix the US healthcare system.

The Concept

Health insurance companies have two inputs: a patient and a procedure, and one output: a check to the practice for the procedure performed. That is it. If we automate the process between the input and the output, then we have eliminated everything the insurance company does, except for transferring the money. The only other thing we need to add would be some way to educate and incentivize the patient on how to live a healthy lifestyle. That would result in fewer claims, causing reduced rates for everyone.

The Execution

We at Sentia have designed and developed a solution that completely automates health insurance. We provide the Electronic Medical Records (EMR) system to the practice, and when they code a patient encounter, we pull out the procedures performed and pay for them in real time. There is no adjudication, no denials, no medical coding, no big buildings, no people and most importantly, little to no cost once the system is built. For this service we charge $10 per month plus the actual cost of the risk. Your health insurance company only returns 53% of your premiums as benefits. We can return the 47% they waste, on average to the patient, in lieu of the previously stated $10 per month. There are other efficiencies we will explain, and a way to manage chronic, behavior-based disease.

Patient Education

Treatment for chronic, behavior based disease consumes 84%, or $3.7 trillion, of the $4.4 trillion spent on healthcare each year in the US. The average of avoidable deaths per 100,000 in OECD countries is 225. In the US it is 335, or about 33% higher. If we could bring the US average down to the OECD average, we would save about $1.2 trillion. That is a further reduction in costs of about a quarter of the total.

How do we do this? We offer financial incentives for people who live a healthier lifestyle as measured by our built-in health and wellness system. This system takes into account measurements taken at the primary care physician’s practice, like height, weight and blood pressure, plus things screened for in blood work. Additionally, there is a mental health screening right in the wellness package. This system looks at all these factors and then prescribes patient education based on the results. At Sentia, this is part of the system. We can tell when the patient opened the patient education and how long they spent reading it, and offer a small discount for simply doing so. A larger discount is offered for reading and following the education, as evidenced by better results in the patient screening.

The Financials

Let’s look at big round numbers. Let’s say we can save the patient about 40% on their health insurance up front. Let’s say that we save the people of the US another 25% by being educated about healthy living and getting to the average OECD deaths per 100,000. We know that eliminating medical coding, providing a free EMR to the practice and putting compliance and efficacy reporting into that system will save each and every practitioner an additional $77,000 per year that they currently spend. That however is only about 2% of the total, so we’ll just ignore it. If we total all that up, we see more than 60% savings. That means that we would have not only the best healthcare on the planet but also the cheapest.

Conclusion

The way that health insurance is run, not only by Cigna, but by everyone, is a complete scam. This is the second scandal for Cigna This year and United Healthcare just denies ⅓ of valid claims for no reason. We have shown a way to save about 60% from the cost of health insurance and addressed both of Commonwealth Fund’s two conclusions about health insurance in the US: cost and education. We have all of this written and deployed in a prototype application. The only thing we really need to get this all started is to clean up that application and turn it into an enterprise application with logging, administration and redundancies in hardware. We will need funding, probably about $100 million over the first two years, like other startup health insurance companies. For comparison, United Healthcare had revenue of $371.6 billion and net earnings of $22.3 billion. With a ~60% savings we should service and retain 90% or more of the 300 million insured people in the US. That gives us a revenue of $36 billion, however, everything in our system is automated so that is a $32.4 billion profit at a 90% profit margin.

If you want to be a part of saving healthcare and make a ton of money, here we are.

We have shown a way to make patients healthier by educating them on the consequences of their behavior, and a way to capitalize on that to the sum of $1.2 trillion or about 25%. If we add that to the process automation savings of our solution, we are in the ballpark of more than 60% savings in total. We already have the best doctors and the best equipment; we just need to implement the above detailed framework to give them all the tools necessary for success.

We have this system in prototype now, fully functioning.

Contact us here or on our site and we will be happy to provide a demonstration of the fully functional prototype.

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We have built a comprehensive health information system to keep the patient healthy and on the right track with the ability to incentivize healthy living. Implementing this system should be fairly simple and will completely revolutionize the way healthcare is paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable, and a way to move toward value-based care.