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Cigna loses motion to dismiss ASC suit over 'systematic,' 'indiscriminate' claim denials

Cigna's motion to dismiss a lawsuit brought by South Amboy, N.J.-based Metropolitan Surgical Institute was partially denied, according to a document filed July 31 in the New Jersey District Court.

The ASC sued Cigna for its "systematic denial of legitimate and proper claims" and failure to make payment upon those claims, court documents show. Cigna was accused of "automatic, indiscriminate" denial and underpayment of claims for medical services provided beginning in 2015.

Metropolitan Surgical Center alleged that Cigna's actions violate the Employee Retirement Income Security Act of 1974, New Jersey state law, and contractual, fiduciary and other obligations owed. As a result of the allegedly illegal actions, the ASC said it incurred more than $2.04 million in losses.

In a motion to dismiss, Cigna countered on seven points, including that the ASC did not exhaust internal claims procedures in the ERISA plans before filing the suit; is not entitled to compensatory damages; and failed to identify the plans at issue.

U.S. District Judge Michael Shipp ruled in favor of Metropolitan Surgical Institute on six points, opening "the door for the facility to sue for payment of the denied claims for which Cigna had been avoiding payment for years," said Keith Roberts, healthcare lawyer and co-chair of litigation at Brach Eichler, who filed the lawsuit on the ASC's behalf.

"The ASC successfully defeated Cigna's motion to dismiss the case asserting that the out-of-networks claims could not be prosecuted against the carrier because the assignment of benefits was invalid," Mr. Roberts said in a prepared statement. "The court specifically upheld the assignment."

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