AMA joins class-action lawsuit accusing Cigna of underpaying claims

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The American Medical Association is accusing health insurer Cigna of underpaying claims filed by providers in the contracted MultiPlan network, the largest third-party network in the country. The AMA has joined a class-action lawsuit alleging the insurer reimbursed for claims at non-participating providers' rates rather than the expected MultiPlan contract rates.

Cigna contracts with MultiPlan to access providers. The AMA and other plaintiffs contend the insurer significantly underpaid claims and put patients at risk of balance billing, and breached certain fiduciary duties, "including its duty 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 patients."

WHAT'S THE IMPACT

The plaintiffs contend that the alleged misconduct advances Cigna's self-interest because it allows the company to collect higher administrative fees. 

"Under its contracts with the employers who establish a self-funded plan, Cigna receives a 'savings' fee, payable by its self-funded customers, that is larger when Cigna causes the plan to pay less for a given claim," according to the lawsuit. "By paying less than the amount required by the MultiPlan Contract, Cigna increases the amount of 'savings' it claims and the resulting fees it receives."

AMA President Dr. Jack Resneck Jr. said by statement that the insurer's alleged misconduct "is riddled with conflicts of interest and manipulations." 

This, Resneck said, "routinely shortchanged payments to MultiPlan Network physicians and interfered with the patient-physician relationship by ignoring the MultiPlan contracts and making incorrect statements to patients about their liability for the unpaid portion of the billed charges."

The Medical Society of New Jersey and the Washington State Medical Association have also joined the suit.

Cigna did not immediately respond to a request for comment.

THE LARGER TREND

The lawsuit comes as Cigna is eyeing expansion into new markets, particularly with its Medicare Advantage plans, which are growing into 108 new counties and three new states this year: Connecticut, Oregon and Washington. This will increase its geographic presence by nearly 30%.

Cigna has increased its geographic presence in MA by 80% since 2019, the insurer said. The company now offers plans in 477 counties across 26 states and the District of Columbia.
 

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Email the writer: jeff.lagasse@himssmedia.com