Denied class-action lawsuit against Cigna over alleged overcharging, ERISA violations

A proposed class-action lawsuit alleging that Cigna overcharged members for medical equipment will not be allowed to proceed, a federal judge in Connecticut has ruled. The plaintiff also alleged that the company had violated its fiduciary duties under the Employee Retirement Income Security Act.

Cigna contended that the plaintiffs would not be able to investigate their claims without an “individualized assessment” of each affected health plan and the extent of their third-party administrator contract with Cigna. The judge agreed and said the plaintiffs failed to establish commonality.

“The variety of potential outcomes across the class and the possibility that Cigna’s actions may prove permissible in some instances while impermissible in others precludes the imposition of singular injunctive relief for the class as a whole,” the judge wrote.

The lawsuit, filed in 2017, alleged that Cigna artificially inflated prices for medical care devices and services and pocketed members’ overpayments. In 2022, Cigna members or those who used Cigna as a third-party benefits administrator sought class certification in the case “with thousands of potential plaintiffs and plans.”

Although the complaint originally alleged numerous ERISA violations and overcharging for services, the class certification bid centered on Cigna’s previous contract with CareCentrix, which ran from 2003 to 2021. The plaintiffs alleged that CareCentrix, a home health benefits manager, paid lower prices to other providers than what Cigna was paying CareCentrix for the same services. The plaintiffs alleged that Cigna overcharged for home medical equipment, such as canes and CPAP machines, and other services arranged by CareCentrix.

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For example, they claimed that Cigna charged nearly 350% more than required for a disposable filter used to treat sleep apnea. A policyholder claimed he purchased the filter from a CareCentrix provider for $25.68 as part of his deductible. However, the provider allegedly had a contract with Cigna and CareCentrix to charge $7.50 for the filter, with Cigna keeping the remaining $18.18.