AMA, Other Medical Groups Go After Cigna Over Underpayments

Prominent medical societies, including the American Medical Association (AMA), are suing private payer Cigna over chronic underpayments to physicians participating in one of their networks.

The class action lawsuit alleges that Cigna refused to apply contractually obligated discounts for medical services as part of its MultiPlan network. As part of the network, physicians had agreed not to balance bill patients by joining the network and getting reimbursed at the MultiPlan Network rates. Balance billing is when providers charge patients the difference between originally billed charges and the payer’s reimbursement rates.

However, the societies say that Cigna frequently reimbursed in-network providers at much lower rates, as if they were not participating in the network. As a result, patients “were exposed to the threat of balance billing,” the lawsuit says.

The Medical Society of New Jersey and Washington State Medical Association also joined the lawsuit, which was first brought on by three patients enrolled in Cigna-administered health plans through their employers and received care from physicians part of the MultiPlan Network.

“Our clients allege that Cigna contractually agreed to apply certain rates, promised in plan documents to honor those rates, and then flatly ignored its contracts and promises,” said Andrew N. Goldfarb, partner at Zuckerman Spaeder, the law firm representing the plaintiffs. “It did so to serve its own financial interests at the significant expense of patients and physicians.”

The lawsuit also claims that Cigna was deceptive to its members, including in its explanation of benefits (EOB) forms that providers had agreed to the lower reimbursement rates and that patients are not liable for additional financial responsibility.

“These deceptive EOBs damage the professional and business relationships between patients and physicians,” the lawsuit states.

“Patients and physicians have a right to expect health insurers to uphold their promise to provide fair and accurate payment for medical services. 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,” Jack Resneck Jr., MD, president of the AMA, said in a separate statement.

Resneck added that, “Cigna’s misconduct is riddled with conflicts of interest and manipulations that routinely shortchanged payments to MultiPlan Network physicians and interfered with the patient-physician relationship by ignoring the MultiPlan contracts and making incorrect statements to patients about their liability for the unpaid portion of the billed charges.”

“By joining Stewart v. Cigna as a plaintiff, the AMA hopes to shed light on Cigna’s misconduct and create remedies so that patients and physicians can look forward to getting what they are promised,” Resneck continued.

AMA, the Medical Society of New Jersey, and the Washington State Medical Association are seeking declaratory and injunctive relief.

Cigna did not immediately provide a comment on the class action lawsuit.