Fed judge OKs suit against Cigna over COVID testing services reimbursements

A federal judge in Connecticut determined that a medical practice’s claims against Cigna in relation to COVID-19 testing services can proceed.

U.S. District Judge Janet Bond Arterton of the District of Connecticut determined that Murphy Medical Associates’ claims under the Connecticut Unfair Trade Practices Act, the Coronavirus Aid, Relief and Economic Security Act, the Families First Coronavirus Response Act, and the Connecticut Surprise Billing Law survived Cigna Health and Life Insurance Co.’s motion to dismiss.

The plaintiffs’ allegations involved reimbursements for COVID-19 tests and infections.

Murphy Medical alleged that Cigna violated the FFCRA, CARES Act, the Employee Retirement Income Security Act of 1974, the CUTPA, and the unjust enrichment, quantum meruit and tortious interference claims related to ERISA and non-ERISA plans.

Before the court, in a May 12 opinion, was defendant’s motion to dismiss plaintiffs’ remaining CUTPA claim.

Plaintiffs alleged that Cigna had engaged in unfair claims settlement practices and failed to timely pay insurance claims in violation of Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat. §§ 38a-816(6)1, which the CUTPA claim is based on, asserting different claims arising under CUTPA based on the CUIPA, and claims based on alleged violations of other statutes.

With regard to whether plaintiffs had alleged Cigna’s actions constituted a general business practice, the court determined the issue came “down to whether sheer frequency of denial of Plaintiffs’ claims is sufficient even without allegation that the practice goes beyond denial of claims from just one provider, the Plaintiffs.”

And according to the court, plaintiffs failed to allege that Cigna violated CUIPA in their processing of claims submitted by any other providers.

In Hartford Roman Cath. Diocesan, in determining whether there was a general business practice, the court had looked to factors that included “the degree of similarity between claims made under the plaintiff’s policy and those made by other alleged victims under their respective policies.”

This factor presumes the existence of other victims when evaluating whether a general business practice exists, and because plaintiffs failed to plausibly plead the existence of other alleged victims to Cigna’s insurance practices, their CUTPA claims based in CUIPA were dismissed.

Lastly, the court determined that plaintiffs could plead a stand-alone CUTPA cause of action not specifically proscribed by CUTPA.

The Connecticut Supreme Court has held, in State v. Acordia, that “[b]ecause CUIPA provides the exclusive and comprehensive source of public policy with respect to general insurance practices … unless an insurance related practice violates CUIPA or, arguably, some other statute regulating a specific type of insurance related conduct, it cannot be found to violate any public policy, and, therefore, it cannot be found to violate CUTPA.”

Additionally, a district judge previously concluded that “some standalone CUTPA claims outside of CUIPA could be maintained ‘where there is an alleged violation of a statute regulating a specific type of insurance related conduct.’”

Though some of the state courts have come to contrary conclusions, where it was held in NEMS, that “‘although § 38a-790-8 reasonably may be characterized as regulating insurance related conduct insofar as it prescribes a standard of conduct for appraisers who estimate the cost to insurers of auto body repairs,’ that provision did not regulate the conduct at issue because the labor rate an auto body shop would be paid was the subject of negotiation between the insurer and the shop, and did not run afoul of the ethical duties of appraisers set forth in the statute.”

The NEMS ruling held that “the Connecticut Supreme Court would have allowed the CUTPA claim to proceed under Acordia’s holding that a statute regulating a specific type of insurance related conduct could give rise to a CUTPA claim, even if the conduct does not also violate CUIPA.”

Arterton agreed with this analysis, as “the Connecticut Supreme Court in Acordia expressly left open the possibility that CUTPA could provide relief based on the violation of ‘some other statute regulating a specific type of insurance related conduct,’” and thus, plaintiffs were able to bring certain, stand-alone CUTPA claims “based on alleged violations of statutes regulating a specific type of insurance related conduct.”

Plaintiffs had sufficiently plead a CUTPA cause of actions based on Cigna’s alleged violations of the CARES Act and FFCRA, as those statutes “regulate the specific conduct at issue in this case: reimbursement for Covid-19 testing services.”

Arterton also determined that the plaintiffs sufficiently pleaded their claim that the Connecticut Surprise Billing Law was violated.

The Surprise Billing Law applies to patients with an “emergency condition.” An emergency condition is defined as having “the same meaning as ‘emergency medical condition,’ as provided in section 38a-591a.”

Read more: Prices for COVID-19 tests vary widely as public health emergency requirements end

And due to “the initially unknown characteristics of a Covid-19 infection which rapidly transformed non-acute symptoms into potential life-threatening Covid-19 emergencies, this determination requires factual determinations about what symptoms existed for patients in question, and what symptoms constituted medical emergencies,” Arterton said.

Thus, at the motion-to-dismiss stage, plaintiffs had sufficiently pleaded their claim that the law was violated.

Murphy Medical’s attorney, Roy Breitenbach of Harris Beach in Uniondale, New York, and Cigna’s attorney, Patrick Walter Begos of Robinson & Cole in Stamford, did not respond to calls for comment.