The court rejected CIGNA’s interpretation of the policy because ERISA requires the summary plan language to be written so that an ordinary patient will understand.
A recent decision issued by a federal court in Texas gives a ray of hope to behavioral health care providers in South Florida who have been unable to collect millions for medically necessary services provided to CIGNA policy holders for addiction and other behavioral health treatment. Specifically, the court in Connecticut General Life Insurance Company et al. v. Humble Surgical Hospital, LLC (Humble) entered a judgment against CIGNA for approximately $16 million covering underpayments, penalties and attorneys’ fees and costs. Although Humble is not a behavioral health provider, the issues and analysis articulated in the case are helpful to behavior health providers here in South Florida who have waited years to be paid for services provided to patients insured by CIGNA.
The Humble case was actually initiated by CIGNA when it filed claims against Humble under ERISA and Texas common law seeking reimbursement for alleged over payments resulting from out-of-network healthcare services, which Humble rendered to patients insured by CIGNA. Specifically, CIGNA argued Humble engaged in fraudulent billing practices as a result of its custom of “fee-forgiving” or waiving the patient’s financial responsibility pursuant to deductibles, co-pays and co-insurance. As a result of Humble alleged custom of waiving the member’s financial responsibility, CIGNA argued that the policy’s language allowed CIGNA to deny the entire claim submitted by Humble to CIGNA. To the extent the patient paid a portion of their financial responsibility, CIGNA argued that pursuant to the policy’s language it was only required to pay the same proportional amount to the provider for CIGNA’s share of the claim as paid by the patient.
The court rejected CIGNA’s interpretation of the policy because ERISA requires the summary plan language to be written so that an ordinary patient will understand. The court found that CIGNA’s interpretation of this language did not pass that test because the average plan participant would not expect CIGNA’s payment to be conditional on the patient’s payment or to be proportional based upon how much the patient paid. Instead, the court found that the average patient would expect CIGNA to pay its full share in accordance with the terms of the various plans regardless of what the patient paid or was capable of paying.
Moreover, the court disagreed with CIGNA’s assertion that CIGNA had the discretion under ERISA to “absolve itself of its responsibility to process and pay claims because it assumed that it could demand upfront payments of co-pays” and then pay some claims on a proportionate share analysis. The court held that CIGNA’s actions were improper and were a breach of its fiduciary duty to its members and to Humble as an assignee of the member’s benefits. Calling CIGNA’s method for processing claims “simply disingenuous and arbitrary,” the court stated that it appears that CIGNA’s purpose to deny the claims was predetermined and that CIGNA, in fact, denied members of the benefit of the bargain they made when they purchased the policy.
This argument is identical to one of the arguments CIGNA has raised against South Florida behavioral healthcare providers to justify its refusal to pay tens of millions in claims for services provided by those providers to CIGNA insureds. Therefore, although the Humble case is a Texas court decision, hopefully the courts in South Florida will take notice of this case and use its rationale to force CIGNA to act in good faith when dealing with South Florida behavioral healthcare providers and to require CIGNA to pay legitimate claims for services rendered to CIGNA insureds. To allow CIGNA to reduce its obligation to pay for such claims based upon how much the patient paid or is able to pay would cause providers who treat patients without an ability to pay to be punished for helping that population. Moreover, such a policy would create a windfall for CIGNA who has already collected premiums from the patient on the promise that it would pay the claims associated with medically necessary medical and behavior health care services.