The country’s largest medical organization and two groups of doctors joined a class action lawsuit against Cigna on Monday, accusing the insurer of dishonest service providers and leaving patients improperly exposed to paying balance bills.
The American Medical Association, the Medical Society of New Jersey, and the Washington State Medical Association allege that Cigna misrepresented its relationship with cost management company MultiPlan, improperly interfered with physician-patient relationships, and violated the Washington State Consumer Law. Cigna and MultiPlan did not respond to interview requests.
“Patients and physicians have the right to expect health insurance companies to keep their promise to provide fair and accurate healthcare payment,” AMA President Jack Resnek Jr. said in a statement. “But alleged misconduct by Cigna has allowed the insurer’s self-interest to take precedence over their promises to doctors in the MultiPlan network and to their patients.
Three patients filed an initial lawsuit in the US District Court for the District of Connecticut in June. Plaintiffs allege that the health insurance company violated its fiduciary duties under the Employees’ Retirement Act of 1974.
The case centers on Cigna’s relationship with MultiPlan, a third-party contractor that operates the nation’s largest network of preferred supplier organizations. Cigna’s agreement with MultiPlan gives it access to the company’s network of doctors and allows it to pay at reduced rates negotiated by MultiPlan with doctors.
By contracting with MultiPlan, the company’s contracted physicians became in-network “participating providers” with Cigna and should therefore be paid at the rates they negotiated with MultiPlan, the lawsuit alleges. According to the plaintiffs, Cigna violated its agreement with MultiPlan from time to time and reimbursed those providers at out-of-network rates.
Because MultiPlan’s contracts prohibit service providers from billing patients, they could face unexpected out-of-network cost-sharing billing when Cigna ignores its agreement with MultiPlan, the plaintiffs allege. The lawsuit alleges that Cigna deliberately underpaid MultiPlan doctors who treated patients covered by self-insurance plans in order to maximize the administrative fees it charges employer clients.
Cigna “falsely tells patients that their providers have agreed to reimbursement rates below the MultiPlan contract rate when the providers have not agreed to do so,” the lawsuit says. “Cigna uses false information about its providers for patients to force them to accept these reduced rates. Cigna does this at the expense of its insurers and their suppliers in order to maximize its own profits,” the plaintiffs allege.