CIGNA Sued For $20 Million UCR Denials Under ERISA And Counter-Sued For "Prompt Pay Discount" Fraud

Share Article

ERISAclaim.com Offers Webinars To Examine The Recent Federal Court ERISA Ruling In A Lawsuit Between CIGNA And An Out-Of-Network Hospital. CIGNA Was Sued By The Hospital For $20 Million UCR Denials under ERISA, CIGNA Counter-sued The Hospital For "Prompt Pay Discount" Fraud.

The hospital ‘prompt pay discount’, alleged by CIGNA as ‘fee forgiving’ fraud in this case, is extremely popular nationwide, now it's up to the Court to decide.

ERISAclaim.com offers Webinars to examine the recent federal court ERISA ruling in a lawsuit between CIGNA and an out-of network hospital. CIGNA was sued by the hospital for $20 million UCR denials under ERISA, CIGNA counter-sued the hospital for "prompt pay discount" ("fee forgiving") fraud. The new Webinars will evaluate this court case, as the 2012 managed care reimbursement litigation trend by providers and payers: the out-of-network (OON) provider UCR litigation under ERISA; and the payer defense under ERISA preemption, lack of ERISA Assignment and failure to complete ERISA appeals, and more importantly, the payer offensive counter-lawsuit for "prompt pay discount" fraud, medical necessity fraud, self referral or deceptive out-of-network referral fraud.

The Court Case Info: North Cypress Medical Center Operating Co., Ltd. et al v. Cigna Healthcare et al, Case 4:09-cv-02556, Filed: 08/11/2009, United States District Court Southern District of Texas Houston Division.

“This $20 million UCR ERISA lawsuit in Houston Texas and all other out-of-network provider UCR cases represent a new reimbursement model and new climate in managed care litigation in 2012. The payers nationwide are taking offensive “anti-fraud” strategies in defending against providers’ UCR lawsuits,” says Dr. Jin Zhou, President of ERISAclaim.com, a national expert on PPACA and ERISA appeals and compliance.

On August 11, 2009, the plaintiff hospital, an approximately 150-bed general acute care hospital in Houston, Texas, filed a lawsuit against CIGNA for alleged $20 million UCR denials under ERISA.

On March 2, 2011, the federal court permitted the hospital’s ERISA lawsuit to proceed.

According to the Court documents, the following are the relevant facts:

“North Cypress alleges, first, that CIGNA has underpaid North Cypress considerably for out-of-network and emergency services it provided to patients participating in health plans insured and/or administered by CIGNA. North Cypress alleges that this significant underpayment has resulted, in part, from CIGNA’s intentional or reckless use of flawed or inadequate data to calculate UCR amounts. Secondly, CIGNA has allegedly failed to promptly pay North Cypress’ reimbursement claims. Third, North Cypress contends that CIGNA entered into “Discount Agreements” with North Cypress via a re-pricing agent, through which CIGNA agreed to pay a discounted price of North Cypress’ invoices for CIGNA’s members. According to North Cypress, CIGNA failed to pay even the discounted amount agreed to in the contracts. As a result of CIGNA’s acts, North Cypress claims that it has been damaged in the amount of at least $20 million. To remedy these alleged violations, North Cypress has brought claims against CIGNA pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. § 1001 et seq., as well as Texas state law.
In particular, on March 2, 2011, the Court concluded:

“The Court finds that North Cypress has properly alleged standing to bring claims under ERISA. The Court also concludes that North Cypress has adequately stated a claim for relief in all but its ERISA § 406 claim. Additionally, North Cypress’ Texas Insurance Code claims are preempted by ERISA. The Court strikes North Cypress’ amended jury demand as it relates to its ERISA claims. Therefore, CIGNA’s Motion to Dismiss is granted in part and denied in part.”

On November 17, 2007, CIGNA filed a counter-lawsuit against the hospital for "prompt pay discount" ("fee forgiving") fraud, among other things, as a part of its defense, in the Court:

“This action arises from an ongoing scheme by NCMC to defraud CIGNA through a practice known as “fee forgiving.”

“NCMC’s so-called business model wrecks these incentives. Instead of collecting the co-insurance from CIGNA plan members that their plans require them to pay, NCMC waives those payments. NCMC tells CIGNA plan members that it will bill them as if they were seeing an in-network provider, eliminating any financial difference to the member between using NCMC and using another provider in CIGNA’s network. On top of this, NCMC offers these plan members over-the-top “hotel-like accommodations,” unlike those in any traditional hospital, including “all private patient suites with upscale room accommodations, including trim, flat screen televisions, private baths, and wireless internet.”

On December 14, 2011, the plaintiff hospital filed a motion to dismiss CIGNA counterclaim, asserting ERISA preemption.

“The hospital ‘prompt pay discount’, alleged by CIGNA as ‘fee forgiving’ fraud in this case, is extremely popular nationwide, now it's up to the Court to decide,” cautioned Dr. Zhou.

The ERISAclaim.com’s 2012 Webinars start at $5,000 per 2-hour session and will cover the following topics:

1.    The factual and legal analysis of provider complaint and payer counter complaint;
2.    Practical impacts of the payer counter complaint on all OON doctors, ASC’s and hospitals
3.    Compliant solutions, from OIG Guidance, to all alleged fraud and abuse preventions
4.    DOL: About 77% of Insured Americans Purchased Out-Of-Network Coverage in Private Industry (BLS, NBS 2010, page 11 of 167): http://stats.bls.gov/ncs/ebs/detailedprovisions/2010/ebbl0047.pdf

To find out more about PPACA Claims and Appeals Compliance Services from ERISAclaim.com:
http://www.erisaclaim.com/products.htm

Located in a Chicago suburb in Illinois, for over 11 years, ERISAclaim.com is the only ERISA & PPACA consulting, publishing and website resource for healthcare providers in the country. ERISAclaim.com offers free webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support. Dr. Jin Zhou is regarded as the industry “Godfather of ERISA claims” for healthcare providers.

For any questions, please contact Dr. Jin Zhou, president of ERISAclaim.com, at 630-808-7237.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Jin ZHou
Visit website