Sunday, May 10, 2015

Cigna refusing to pay for Early Intervention


When Cigna refuses to pay for Early Intervention services, the taxpayers of Massachusetts get stuck with the bill. This could easily be costing Massachusetts $1 million to $2 million per year or more. We had an employer-provided health insurance plan through Cigna in 2013-2014. Our child received Early Intervention services. Despite our plan documents saying that Early Intervention services were covered, Cigna denied every single claim when it was first submitted. Our experience on more than 40 claims totaling over $8000 was that Cigna consistently lied about our plan coverage in an attempt to make Massachusetts pay instead of Cigna. After more than a year of appeals, we were able to correct our claims, but that only corrects the payments for one child out of the 36,000 who are in Early Intervention. Massachusetts should investigate how many times Cigna has pulled this scam, and stop it from continuing.

What is Early Intervention (EI)?

Early Intervention is a set of developmental services provided to children from birth to their third birthday. It includes evaluations, individual home visits by social workers and developmental specialists, and group services. Each EI agency that provides EI services in Massachusetts covers a specific town or region. You can find a lot of information about EI at

Who pays for Early Intervention in Massachusetts?

Early Intervention services are sometimes covered by health insurance. Massachusetts has a coverage mandate for EI services, but that mandate is not obligatory for self-insured plans. The Massachusetts Department of Public Health pays for any costs not covered by insurance, including co-payments and deductibles. The EI provider submits claims to health insurance when health insurance is available, and then any remaining amounts are submitted to the state for payment.

What happens when an insurer like Cigna wrongly refuses to pay for EI services?

The state gets stuck with the bill instead, while the insurer (or the employer in the case of a self-insured plan) saves money. The EI provider still gets paid, and the families still receive EI services, so the state is the only party that suffers a loss.

DPH makes EI providers report when services are not covered by a commercial plan, but that process assumes that the insurer is being truthful about whether EI services are covered. This assumption that an insurer will be truthful is a huge vulnerability which Cigna is able to take advantage of.

How much money could be involved?

The most expensive month we saw was $1207.01, while other months were typically $800 to $900. From our experience, this could easily mean costs on the order of $10,000 per year for one child. In Fiscal Year 2014, there were over 36,000 children enrolled and receiving EI services. Over 16,000 had commercial insurance. The state paid over $147,000,000 for EI services, which would be on the order of $7000 per year per child on average.

As of a few years ago Cigna covered over 10% of the people in Massachusetts with commercial insurance. That could translate into 1600 children covered by Cigna who are receiving EI services. At $7000 per year per child, if Cigna is wrongly denying even 10% to 20% of those services, that would be $1 million to $2 million per year.

How did Cigna treat Early Intervention claims for your child?

Cigna denied every single Early Intervention claim that was submitted for our child. There were over 40 EI claims over the course of a year, many covering more than one date of service, and Cigna denied every claim. Our Summary Plan Description said that Early Intervention services were covered. Whenever we called Cigna, we were told that Early Intervention services were not covered. The EI provider successfully appealed a few of these denials, but they eventually gave up and started to believe Cigna when Cigna wrongly said that EI services were not covered. After we placed many phone calls appealing these denials, persisting through repeated denials and incorrect statements from Cigna, Cigna eventually reprocessed and paid these claims.

The initial claims processing from Cigna was completely consistent: no EI claim was paid on the first submission.

Was this deliberate fraud on the part of Cigna?

When an insurer shows a pattern of denying every legitimate claim, lies about coverage whenever a customer questions the denials, ignores the statements in the Summary Plan Description, and knows that a third party will end up footing the bill instead, it certainly doesn’t look good.

Was the problem with Cigna or with Tufts?

Our self-insured plan is administered by Cigna, but the claims that Cigna receives within Massachusetts are sent on to Tufts Health Plan for processing. Cigna created the Summary Plan Descriptions, we only interacted with Cigna, and Cigna consistently refused to acknowledge that there was anything wrong with these claim denials, so it looks to me like a problem with Cigna.

(It is clear that the problem was not tied to the employer, who put together a perfectly good insurance plan and chose a major health insurance company to administer the plan.)

How would Massachusetts recover money from Cigna?

1. Identify which EI claims are being submitted to Cigna and are being denied on the basis of services not being covered by the plan. This information should be known by EI providers and by Cigna, and should be collected by DPH.
2. Total up those denied claims per child.
3. Start with the children with the largest total dollar amounts of denied claims in a year. Check the Summary Plan Description or other plan documents for each child’s plan to see which plans are supposed to cover EI services. It should rapidly become apparent how widespread this pattern is, and how much money the state stands to recover from Cigna.

Who should investigate?

The Massachusetts DPH is losing money because of Cigna. The Massachusetts Inspector General might like to save the state some money. The Massachusetts Attorney General might like to put a stop to insurance fraud that directly impacts the state’s budget.

How could state laws or regulations be changed to reduce this problem?

Whenever an insurer denies a claim for EI services, the insurer could be required to provide a copy of the actual plan documents (such as a Summary Plan Description) to DPH. DPH should check the actual plan documents for each child once per year to confirm that the denial is correct.

When an insurer wrongly denies EI claims on a repeated basis, there should be clear and significant penalties assessed. An insurer like Cigna apparently needs a financial incentive to avoid defrauding the state.


Fred said...

I think you should put your estimate of what this costs the state right at the beginning. That's what's going to make them investigate, that's what would be the headline for an article.

Perhaps summarize the whole argument in a paragraph, including the cost to the state as prominently as you can make it.

Michael said...

Thank you -- I've added a paragraph at the beginning.

irilyth said...

My first thought was "it's very detailed but too long". I like the summary paragraph at the beginning, but it wasn't clear to me at first that it was a summary. One thing I often do -- dunno if it works, but I do it anyway -- is say "Summary" as a header before a summary paragraph, and then "More details follow" at the end, or something, to make that more clear.

I think it's generally good, though. And that the situation sucks.