A new federal court filing reveals that the insurance giant Cigna started investigating Dr. Steven Murphy for potential billing fraud as early as April 2020 — the same month the city signed on with the Fairfield County doc to lead the way in providing walk-up Covid tests across New Haven.
That’s the latest revelation in the ongoing saga of the controversial Greenwich-based doctor and his medical practice, Murphy Medical Associates, labelled pandemic “profiteer” in court documents.
The filing comes in the federal case Murphy Medical Associates LLC v. Cigna Health and Life Insurance Company.
A handful of companies controlled by Murphy first filed that lawsuit in the U.S. District Court of Connecticut last November in a bid to get Cigna to cough up $4.6 million in allegedly unpaid reimbursements for Covid-19 tests.
Last week, Cigna’s attorneys filed a new 282-page “motion for order compelling discovery” in the case.
Buried in the middle of that motion is a 10-page report by Cigna’s Special Investigations Unit (SVU).
That report, dated May 25, indicates that Cigna first started investigating Murphy for Covid test over-billing in April 2020.
That’s the very same month that the Elicker Administration officially signed on with Murphy to set up a free walk-up testing site at Day Street Park, and to conduct a variety of mobile pop-ups at locations across the city for the next roughly six months. The city didn’t cut ties with Murphy until October 2020.
“Among the red flags that prompted SIU involvement,” Cigna’s attorneys wrote in the new court filing, “were billing for complex ‘evaluation and management’ interactions at mobile sites and billing significantly more than the typical charge for tests.”
And what did Cigna’s investigation ultimately find?
“SIU identified numerous problems with Plaintiffs’ billing, including E/M and Preventative Medicine Counseling Services that were not provided as billed; and unnecessary testing for multiple respiratory pathogens (instead of testing only for COVID-19). … The report concluded that Cigna had overpaid Plaintiffs for approximately $470,000 for claims they submitted during the COVID pandemic. Thus, Cigna has substantial reasons to question the veracity and validity of the COVID-related health services for which Plaintiffs’ seek ‘more than $6 million.’”
Mayor Justin Elicker told the Independent that his administration was not aware that Cigna had begun an internal investigation into potential fraud by Murphy at the same time that his administration set the doctor up with city-sponsored testing sites.
Elicker noted that his administration did flag Murphy’s billing practices for Anthem last summer after a city employee raised concerns about large bills sent by Murphy to the insurer following a Covid test.
“We then had a conversation with Dr. Murphy, asking him to assure us he would only do Covid testing,” Elicker said. “We weren’t able to come to a full agreement on that.”
Eventually, in October, the city cut the cord with Murphy.
Murphy Medical Associates attorney Michael Battema declined to comment for this article. The Murphy Medical lawyers representing the practice in their ongoing federal suit against Cigna did not respond to a request for comment by the publication time of this article. In previous interviews with the Independent and in previous court filings in the federal case, Murphy’s lawyers have defended him as a pandemic-era folk hero daring to challenge the “illegal and irresponsible” under-payments of an insurance giant.
Murphy has described himself as a “pioneer” in the effort to set up mass, accessible Covid-testing at the onset of the pandemic. He claimed he used cutting-edge medical technology to treat patients who needed to be tested not just for Covid-19, but also for “other respiratory viruses and infections that could cause the same or similar symptoms as Covid-19.”
Murphy told the Independent by email that Cigna has misrepresented his companies in court filings in the ongoing federal case. And, he said, Cigna is currently “being sued for RICO violations as well as by other medical and laboratory providers.”
Patients from across Connecticut and New York, meanwhile, have spoken up over the past year about how they visited government-backed testing sites run by Murphy to receive only a Covid-19 test—and later found out that Murphy had billed their insurance companies $2,000 a pop (or more) for a suite of unrequested and potentially unrelated medical treatment. (This was first reported by the Independent, then the Stamford Advocate, and the New York Times. Murphy ran walk-up Covid testing sites in Greenwich, Stamford, New Canaan, Darien, Fairfield, Bridgeport, New Haven, West Haven, Stratford, and Ridgefield, Connecticut, and Bedford, Brooklyn, and Pound Ridge, N.Y.)
New Haven helped Murphy set up shop and expand his empire early, with promises that city residents would get free, accessible testing to help stop the spread of Covid.
At least two New Haven residents received threatening debt collection letters from a North Carolina-based laboratory conglomerate that stemmed from the supposedly “free” Covid-19 test they received at city-sponsored, Murphy run sites.
A representative from the state Attorney General’s office confirmed for the Independent on Monday that the they are still investigating Murphy and his medical practice over allegations of over-billing and fraud.
$46,764 Billed For 1 Patient
The 10-page investigative report in the new 282-page court filing includes a wealth of details about what Cigna knew, and when it knew it, about Murphy’s billing practices for Covid tests.
Click here to read that report in full.
The report states that Cigna’s SIU started investigating such fraud claims on April 22, 2020.
That’s when an SIU fraud senior manager identified through an internal analytics report that Murphy Medical was submitting lots of billing codes for high level evaluation and management (E/M), preventative screenings, and other non-Covid-related medical services.
As described in the fraud investigation report, Cigna interviewed customers, reviewed verification of service letters and customer complaints, and conducted a probe sample of medical records received from Murphy Medical Associates as part of a retrospective review.
“Based on investigative findings, it was determined that the services billed by Murphy Medical Associates LLC were not supported by customer statements or medical records,” that report’s summary reads.
In February 2021, Cigna placed a flag on Murphy Medical’s tax identification number to deny all services as “Services Not Rendered As Billed.” The insurance giant also sent a damages notification letter in the amount of $468,829.28 to Murphy Medical in March 2021.
The “Investigative Findings” section of the 10-page report states that Murphy was already an out-of-network healthcare provider for Cigna following a separate 2019 investigation that “identified significant issues that resulted in the termination of Steven A. Murphy, MD from the Cigna network”.
Based on this latest Covid-related investigation, Cigna found that Murphy Medical had been billing the insurance company a total of 38 different lab codes, with the top paying codes as ones for a test seeking to identify 12 to 25 different respiratory viruses, a half-hour doctor’s office visit, and medical counseling related to a patient’s age, family history, and other areas of concern.
“No COVID-19 related testing procedure codes were billed,” the Cigna report reads, while many of the above codes were billed for the same date of service.
Cigna then interviewed 10 customers about their experiences with Murphy Medical.
“All interviews indicated that COVID-19 testing was performed at a drive-thru testing location,” the report reads. “Customer responses indicated that preventative screenings did not occur. Customers who were billed for follow-up telemedicine appointments reported that those phone calls only consisted of a positive or negative COVID-19 test result and did not include anything else. The results of the customer interviews suggested misrepresentation of services as customers were received COVID-19 testing only, and did not include respiratory panels which is what was billed for these customers (CPT 87633). The interviews also suggested services not rendered as billed as customers did not receive the preventative medicine medicine or high level E/M services that were billed.”
According to the report, Cigna followed up by sending verification of service letters to a random sample of 100 customers with dates of service after March 15, 2020.
Thirty-eight of those VOS letters were completed and returned. Three indicated that they had no issues with Murphy Medical, six said they were unclear as to whether or not services were rendered as billed, and 29 indicated that services were not rendered as billed.
The Cigna fraud report goes into some detail on one of the more head-scratching discoveries of the insurance company’s investigation.
According to the report, Murphy Medical billed a total of $46,764 in Covid-19 related claims for a single patient.
They did so across 60 different claims submitted to Cigna between June 2020 and January 2021, with a total of 48 unique dates of service and 22 Covid-19 related diagnostic tests.
These claims included bills for respiratory panel testing, Covid diagnostic testing, evaluation and management services, and preventative medicine counseling. The majority of the claims for this particular patients were billed with a diagnosis of Z20.828—or “Contact with and (suspected) exposure to other viral communicable diseases.”
“An interview was conducted with the customer in question and the customer reported that they were receiving mandatory testing weekly at her place of employment in New Haven, CT,” the report reads.
“The customer reported that they only received Covid-19 diagnostic tests and denied evaluation and management services and preventative medicine counselling that was billed on the same dates as the diagnostic testing codes. When asked about telemedicine consults, the customer explored that they received brief, 15-second phone calls with their test results.”
The fraud investigation report subsequently concluded that Murphy Medical’s services to patients were not rendered as billed. Those included:
• Evaluation and management services (CPT Codes 99202, 99212, 99213, 99214): “Customer interviews revealed that evaluation and management visits consisted of brief, unsolicited phone calls where Covid-19 test results were received. Evaluation and management visits billed on the same day as respiratory panels did not occur as this was drive-through testing where a nasal swab was collected.”
• Respiratory panel testing (CPT Code 87633): “All respiratory panel lab work was signed and dated on 8/14/2020 regardless of the date of service. Customer interviews revealed that no customers were aware of additional respiratory testing aside from Covid-19 testing and the only results communicated to customers were for Covid-19 testing. Additional respiratory panel tests were not related to the patients. Customers reported that only one specimen was collected despite additional Covid-19 antigen testing performed by outside laboratories.”
• Preventative medical counseling (CPT Code 99401): “Medical record documentation identifies dietary counseling, exercise counseling, and counseling related to Covid-19 precautions and hygiene and documentation is similar across all patient records suggesting medical record cloning.”
• Laboratory testing (CPT Codes 82306, 82378, 82533, 82607, and more…): “There was no date indicating when the testing was performed in the medical records. There was no specimen collection date documented in the lab report. In addition, members were specifically seen for Covid-19 testing however there was no documentation for the rationale of the additional testing.”
Based on these findings, the report reads, Cigna sent an “overpayment letter” to Murphy Medical on March 4, 2021 stating that Cigna overpaid Murphy Medical by $468,829.28 between March 1, 2020 and Feb. 4, 2021. Cigna then flagged Murphy Medical’s tax identification number effective Feb. 4, 2021 “to deny all claims as services not rendered as billed.”
The report states that Murphy Medical’s attorneys John Martin and Barry Cepelewicz responded on April 5 by refuting all of Cigna’s findings.
“As this matter is currently in litigation, the SIU was advised by Cigna’s external counsel, Robinson & Cole LLP, to cease communications with the HCP [health care provider] or their attorneys and they will pursue the matter.”
See below for previous coverage of Dr. Murphy’s Covid-19 testing and billing practices in New Haven.
• After $2,774 Covid Test, Dunner Persists
• Cigna Blasts Pandemic “Profiteer” Doc
• Covid-Test Doc’s Woes Mount; UNH Bails
• Covid Updates: Homeless Plan Previewed; City Drops Dr. Murphy
• Debt Collector Dogs “Free” Covid Testee
• Covid-Free? We’ll Tell You Next Week
• We Got Swabbed In Day Street Park
• Dixwell, Fair Haven Test Sites Readied