Ten California addiction providers filed a lawsuit against Cigna on Aug. 19, claiming the insurer shortchanged them by $12.8 million.
The lawsuit spans March 1, 2022, through March 15, 2026. Before 2015, Cigna would pay billed charges in full or at a “reasonable and customary” rate but eventually changed that policy, according to the complaint, filed in the U.S. District Court for the Central District of California.
Medicare did not have rates for the services offered by the substance use disorder facilities at the time. In 2015, the insurer instead started reimbursing out-of-network substance use disorder claims using “inapplicable” rates from Medicare, mapping billing codes from different services.
The claims at issue cover 83 patients. The lawsuit said Cigna paid each provider between 0% and 28.29% of the covered charges, collectively paying them 16.42% of their overall covered charges, which amounted to $15.3 million. The providers said this resulted from Cigna’s use of inapplicable Medicare rates, downcoding, “defective” databases of customary SUD treatment payment rates, bundled per diem rates and coverage restrictions.
Along with its per-member, per-month fee, Cigna also would land a “cost containment” fee between 27% and 29% of the difference between what the provider billed and Cigna paid, according to the complaint.
Cigna is accused of relying on inapplicable Medicare rates, using the Viant and Data iSight databases from MultiPlan, now Claritev, for repricing. MultiPlan would also get a 9% to 12% cut of net savings, as a result, the lawsuit said. The complaint said MultiPlan’s fee was “half of what plaintiffs were paid.”
The lawsuit cited a separate complaint, filed in 2020, involving Cigna and some overlapping plaintiffs. A March 2024 order from that case said Cigna’s percentage of fees in relation to the cost containment efforts “gives rise to a certain ‘degree of skepticism,'” possibly incentivizing lower reimbursement.
Becker’s contacted Cigna and will update this story if more information becomes available.
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