Cigna sued for alleged CARES Act violations
DoctorNow alleged that the defendants were required to provide full coverage and reimbursement for COVID-19 testing.
DoctorNow Inc., a diagnostic laboratory, claimed Cigna and Connecticut General Life Insurance failed to pay more than $5.7 million for COVID-19 testing in violation of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act.
The lawsuit was filed in Los Angeles Superior Court against Cigna Corp., Cigna Health and Life Insurance Co., Connecticut General Life Insurance Co., Cigna Health Management Inc. and Cigna Healthcare of California Inc. on behalf of the plaintiff by Novian & Novian.
Under the Families First Coronavirus Response Act and the CARES Act, DoctorNow alleged the defendants were required to provide full coverage and reimbursement for COVID-19 testing.
However, the defendants instead allegedly created “policies and procedures to systemically deny payment and underpay for COVID-19 testing and services,” according to the lawsuit.
The action is seeking alleged unfulfilled payment and an injunction to “restrain and prevent the ongoing illegal practices of defendants, particularly claims for services provided during the public health emergency and any potential future public health emergencies.”
DoctorNow is also pursuing payment penalties of 15% per annum, a prejudgment interest rate of at least 7% per year, attorney fees and punitive damages.
Cigna did not respond to a request for comment, and no counsel had entered an appearance for the defense by press time.
“These collective claims underscore the multifaceted relief sought by DoctorNow to rectify the adverse consequences resulting from Defendants’ actions during the public health emergency, while establishing a precedent for addressing similar circumstances in potential future public health emergencies,” the complaint claimed.
Counsel for the plaintiff, Farhad Novian and Matthew J. Novian, did not respond to a request for comment.
Related: Cigna uses algorithm that auto-denied 300,000 claims, alleged in lawsuit
Other medical providers have filed lawsuits against insurance companies in various jurisdictions such as New Jersey, Connecticut and Texas.
A Texas federal judge in 2022 concluded that Diagnostic Affiliates of Northeast Hou LLC had “an implied private right of action” under the FFCRA and CARES Act. The parties settled, and the final judgment was entered in September 2023.
In the case Murphy Medical Associates v. Cigna Health and Life Insurance, a Connecticut federal judge similarly ruled in 2023 that Connecticut Unfair Trade Practices Act claims under the CARES Act and FFCRA could proceed.