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Cigna Vs. Humble - Impact on Balance Billing and OON Providers

In Cigna vs. Humble, the health insurance company Cigna sued Humble Surgical Hospital LLC for improper billing practices in an attempt to recover $5 million in alleged overpayments made to the physician-owned hospital. In a landmark decision, Senior U.S. District Judge Kenneth M. Hoyt ruled in favor of Humble, ordering Cigna to pay more than $13 million in underpaid claims and ERISA penalties. Judge Hoyt held that the insurance company violated its policies by failing to cover out-of-network services.

During the nine-day bench trial, Cigna’s arguments failed to gain traction in the courtroom. Specifically, Cigna claimed that the hospital failed to collect co-payments or patient deductibles and engaged in free forgiving, reducing the patient-share of medical costs. The insurer put forth that these practices excluded them from paying on associated claims. However, the judge did not agree with this interpretation, calling Cigna’s actions an abuse of the company’s discretion.

Instead, the judge sided with the Humble Surgical Hospital in its counterclaim that Cigna refused to process and pay legitimate claims covered by the terms of their plan. Judge Hoyt ordered Cigna to pay $11.4 million for underpaid claims and $2.3 million for Employee Retirement Income Security Act (ERISA) penalties. This may be the first time in this industry’s history that a company such as Cigna was made to pay ERISA penalties to a hospital. Judge Hoyt’s ruling represents a watershed moment in out-of-network (OON) reimbursement and claims processing.

Houston Health Care and Medical Law Attorneys

Health care providers and insurers must navigate through an increasingly complex legal world. From accusations of fraudulent billing practices to regulatory compliance issues, protecting the interests of your organization can be challenging. At Hendershot, Cannon, Martin & Hisey, P.C. our team of attorneys can assist health care organizations with a wide range of legal concerns. We routinely assist health care providers in billing and collection issues for out-of-network providers. When the stakes are high, do not hesitate to contact our firm.

Do you have questions about a legal issue? Call us today for a free initial consultation.

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