In September 2022, the American Medical Association (AMA) joined a class-action lawsuit against Cigna alleging that the company underpaid claims filed by providers in the contracted MultiPlan network. MultiPlan is the largest third-party network company in the United States and contracts with more than 1.2 million providers throughout the country.
When providers enter into a contract with MultiPlan, they agree to accept a certain percentage of the total billed charges as payment in full and agree to not hold patients liable for the balance. The participating providers indirectly contract with Cigna since Cigna contracts with MultiPlan to access their provider network.
The lawsuit, which was initially filed in June, alleges that Cigna reimbursed for claims from providers in MultiPlan’s network at its non-participating providers rate instead of the rate expected for a MultiPlan contract. It was brought by three plaintiffs who were exposed to balance billing as a result of Cigna’s misconduct; each of the three plaintiffs had internal appeals filed on their behalf, but all were denied.
The lawsuit goes on to say that for self-funded plans (such as those of the plaintiffs), the alleged misconduct from Cigna allowed the company to receive higher administrative fees. “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,” the lawsuit explains. “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.”
Therefore, Cigna “significantly underpaid claims, and put patients at risk of balance billing.” The lawsuit further alleged that Cigna “breached its 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 about the interests of plan member patients.”
The lawsuit seeks to represent all those who see MultiPlan providers and who are insured under a Cigna plan governed by the Employee Retirement Income Security Act (ERISA).
Jack Resneck, Jr., President of the American Medical Association, released the following statement, “Patients and physicians have a right to expect health insurers to uphold their promise to provide fair and accurate payment for medical services. But alleged misconduct by Cigna has allowed the insurer’s economic self-interest to be prioritized ahead of their promises to physicians in the MultiPlan Network and their patients. The AMA and other physician organizations allege that Cigna’s misconduct is riddled with conflicts of interest and manipulations that 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. By joining Stewart v. Cigna as a plaintiff, the AMA hopes to shed light on Cigna’s misconduct and create remedies so that patients and physicians can look forward to getting what they are promised.”
In addition to the AMA, the Medical Society of New Jersey and the Washington State Medical Association also joined the lawsuit.