The nation’s largest medical organization and two physician groups joined a class-action lawsuit against Cigna Monday, accusing the insurer of shortchanging providers and leaving patients inappropriately exposed to balance bills.
The American Medical Association, the Medical Society of New Jersey and the Washington State Medical Association allege Cigna misrepresented its relationship with cost-management company MultiPlan, improperly interfered in doctors’ relationships with patients and violated the Washington state Consumer Protection Act. Cigna and MultiPlan did not respond to interview requests.
“Patients and physicians have a right to expect health insurers to uphold their promise to provide fair and accurate payment for medical services,” AMA President Jack Resneck Jr. said in a statement. “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.
Three patients filed the original lawsuit in the U.S. District Court for the District of Connecticut in June. The plaintiffs claim the health insurance company breached its fiduciary duty under the Employee Retirement Income Security Act of 1974.
The case centers on Cigna’s relationship with MultiPlan, a third-party contractor that operates the nation’s largest preferred provider organization network. Cigna’s agreement with MultiPlan gives it access to the company’s physician network and allows it to pay the discounted rates MultiPlan has negotiated with doctors.
By contracting with MultiPlan, the company’s contracted clinicians became in-network “participating providers” with Cigna and therefore must be paid at the rates they negotiated with MultiPlan, the lawsuit alleges. According to the plaintiffs, Cigna occasionally disregarded its agreement with MultiPlan and reimbursed those providers at out-of-network rates.
Because MultiPlan’s contracts bar providers from balance-billing patients, they can be exposed to surprise bills for out-of-network cost sharing when Cigna ignores its agreement with MultiPlan, the plaintiffs charge. Cigna intentionally underpaid MultiPlan physicians who treated patients covered by self-insured plans to maximize the administrative fees it collects from employer clients, the lawsuit alleges.
Cigna “falsely tells patients that their providers have agreed to reimbursement rates below the MultiPlan contract rate, when providers have not so agreed,” the lawsuit says. “Cigna uses misrepresentations to patients about their providers as a means to pressure providers to agree to those discounted rates. Cigna does so, at the expense of its insureds and their providers, in order to maximize its own profits,” according to the plaintiffs.