Cigna hit with ERISA class action lawsuit for allegedly overcharging members
The health care provider negotiates lower rates with in-network providers to save members money, however, members allege that Cigna participated in a “fraudulent scheme” that overcharged its members, says the complaint.
An ERISA class action suit has been filed against Cigna Health and Life Insurance Co. in Connecticut District Court, alleging the insurer is overcharging for medical services.
Arizona citizen Aubrey Srednicki, the named plaintiff, has a health care plan that claims Cigna negotiates lower rates with in-network providers to help those insured with Cigna to save money, the complaint said.
However, the plaintiffs allege that Cigna has participated in a “fraudulent scheme,” and the proposed class members did not save money, and were overcharged for medical services.
The complaint lays out an example where Srednicki obtained a blood test from an in-network provider, LabCorp, and allegedly discovered the uninsured cash price was significantly less than what she paid.
On the Explanation of Benefits, Cigna allegedly said the provider was “HLTH DIAG LAB” instead of the actual provider LabCorp, and the amount billed was $17,462.66.
The cash price for an uninsured customer at LabCorp was allegedly $449.
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Cigna claimed it had provided a discount of $14,572.66 on the Explanation of Benefits, and the plan covered $471.02 of the $2,787 covered amount, the complaint said. This left Srednicki with the responsibility to pay $2,315. 98 in deductible and coinsurance payments.
Srednicki’s doctor allegedly orally confirmed that Cigna had paid in full for the blood test with the $471.02, the complaint said.
“Cigna did not disclose to plaintiff Srednicki in its billing materials the fact that LabCorp. had been paid in full nor did it disclose that, in fact, there was no ‘balance’ to bill plaintiff Srednicki,” the complaint said.
In addition, the plaintiffs allege that “‘HLTH DIAG LAB’ is a doing-business-as pseudonym for Cigna-affiliate Cigna Healthcare of Arizona, Inc.,” to create a fake invoice, the complaint said.
“These fictitious amounts were then included on a fraudulent invoice, prepared by Cigna Medical Group, and sent through interstate mail to plaintiff Srednicki and demanding a fraudulent payment to Cigna Medical Group in the amount of $2,315.98,” the complaint said.
The plaintiffs further claim the defendant is a fiduciary of all the class members’ plans under ERISA, the complaint said.
“Defendant breached the terms of the ERISA Plans and legal obligations, committed breaches of fiduciary duty and prohibited transactions, and harmed plaintiff and class members,” the complaint said.
A representative for Cigna did not immediately respond to a request for comment. No attorney had entered an appearance for the defense by press time.
Plaintiff counsel Robert A. Izard of Izard, Kindall & Raabe and William H. Narwold of Motley Rice did not respond to a request to comment.