Thursday , July 29 2021

Cigna beats one provider network pay suit, but others still loom

A federal judge on Monday dismissed a lawsuit alleging Cigna underpaid behavioral health providers for out-of-network claims and passed big bills on to patients.

U.S. District Judge Edward Davila in the Northern District of California tossed the proposed class-action lawsuit brought by four behavioral health providers against Cigna, rejecting allegations that the Bloomfield, Conn.-based insurer engaged in antitrust, racketeering, fraud, conspiracy and unfair business practices.

The providers claimed that Cigna violated federal and state laws by systematically reimbursing them for mental health and substance abuse treatment at unreasonably low rates that violated the terms of their patients’ insurance plans.

Patients who were enrolled in Cigna employer health plans were left with big bills that often amounted to 90% of the cost of their care, the complaint alleged.

But Davila ruled that since the patients ended up paying the providers for the care, they “are the more direct victims.”

“Plaintiffs’ injuries arise, if at all, only to the extent that their patients do not pay the amounts that Cigna does not reimburse,” the judge wrote.

The Cigna plans allegedly paid Viant, a vendor that is also named as a defendant in the case, to reprice each out-of-network claim, and providers claimed they weren’t paid the promised “usual, customary and reasonable” rates. Viant is owned by MultiPlan, which describes itself as a healthcare cost-management company.

Davila also ruled nothing in Cigna’s plan requires it to reimburse providers at the larger rate requested. Because these individuals gained coverage through ERISA, Davila said the state complaints are duplicative of the federal allegations and should be dismissed. Finally, plaintiffs’ lawyers fail to prove that Cigna and Viant engaged in deceitful conduct.

“The complaint lacks any specifics as to the who, what, when, where, and how of any particular fraudulent communication,” Davila wrote.

The providers can amend their complaint on all allegations except the antitrust claim before April 19.

Cigna still faces other similar lawsuits. The Bloomfield, Conn.-based payer faces a similar lawsuit from a group of patients. These individuals argue that because the insurers underpaid their providers, they were left on the hook for bills averaging $30,000 each.

On March 23, Davila ruled that patients’ claims that Cigna violated federal laws around plan payment, operations and public informational materials will continue to be debated in the U.S. District Court for the Northern District of California.

He tossed antitrust, racketeering, fraud, conspiracy and unfair business practice charges, saying Cigna and Viant’s relationship is indicative “routine commercial dealing” and that plaintiffs fail to show that the two companies intended to fraudulently underpay claims. He reiterated that their relationship is not competitive and therefore does not necessitate antitrust action.

Cigna does not comment on pending litigation.

United Behavioral Health faces similar allegations from patients and providers, alleging it too worked with Viant to pay for benefits at below-market rates.

On March 11, United Behavioral Health filed a motion to dismiss behavioral health providers’ federal claims. That same day, U.S. District Judge Yvonne Gonzalez Rogers denied a motion by MultiPlan to dismiss racketeering and fraud claims by patients.

“We are committed to helping people access the mental health and substance use treatments they need, and reimbursing providers, including out-of-network providers, consistent with the terms of members’ benefit plans,” United said in a statement. “We will vigorously defend ourselves in this case.”

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