Class Action Alleges Cigna Underpaid In-Network MultiPlan Claims

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Cigna Corporation has unlawfully underpaid health insurance claims submitted by consumers for services covered through MultiPlan, the country’s largest third-party network. 

More than 1.2 million healthcare providers contract with MultiPlan, the case says, and are part of the “MultiPlan Network.” Health benefit plan issuers and claims administrators, such as the defendant, also enter into contracts with MultiPlan to gain access to this network. Indeed, the suit says, one way Cigna communicates its relationship with MultiPlan is by the placement of a MultiPlan logo on insurance cards offered to members.

According to the case, providers who have entered contracts with MultiPlan agree to accept a set percentage of a billed charge as payment in full. The lawsuit stresses that this means a provider agrees not to hold a patient liable for the difference between their original billed charges and the discounted MultiPlan rate, the lawsuit stresses.  

The case argues that Cigna, as a MultiPlan client, is required to apply the contracted MultiPlan rates when processing insureds’ claims instead of the “lower reimbursement methodology” it uses in calculating reimbursement for out-of-network healthcare providers. The suit out of Connecticut alleges, however, that Cigna, in certain instances, does not apply the contracted MultiPlan rates to an insured’s claim.  

By applying the “lower reimbursement methodology” it uses for non-participating providers, Cigna paid less in benefits, did not give proposed class members the benefits they were entitled to, and left them exposed to the threat of “balance billing,” the suit says.  

“By engaging in this misconduct, Cigna underpaid Plaintiffs’ claims,” the suit alleges. “It also breached its fiduciary duties, including its duty of [sic] to honor written plan terms and its duty of loyalty, because its conduct serves Cigna’s own economic self-interest and elevates Cigna’s interests above the interests of plan member participants.” 

For fully insured Cigna plans, in which the company administers the plans, receives premiums from insureds, andpays medical expenses from its own corporate assets, the company’s self-interest is obvious, the lawsuit says. Namely, the less Cigna pays in benefits, the more money it gets to keep, the case states. 

For self-funded plans like those held by proposed class members, however, Cigna’s alleged underpayment of MultiPlan claims “advances its self-interest” in that it allows the company to pull in higher administrative fees, the filing claims. The reason for this, according to the case, is that Cigna, under its contracts with employers who’ve established self-funded health insurance plans, receives a “savings” fee that is larger when the company causes a particular plan to pay less for a given claim.  

By paying less than the amounts required under MultiPlan contracts, Cigna is able to increase the amount of “savings” it claims and the resulting fees it stands to receive, according to the case. 

The lawsuit looks to represent all individuals in the United States who were insured under a Cigna Plan governed by the Employee Retirement Income Security Act (ERISA) and who received healthcare services from a provider that contracted indirectly with Cigna via a MultiPlan contract, where the Cigna plan requires that the allowed amount be based on the MultiPlan contract, and where Cigna set the allowed amount for such services below the rate required by the MultiPlan contract. 

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.