CIGNA client, DHL Express, and its plan administrator, Robert Whitaker have been sued in federal court in Houston, alleging that the giant delivery company teamed up with its insurance company and brazenly engaged in a “scheme to withhold, embezzle, and convert ERISA plan assets through a pattern of fraudulent benefits transactions and prohibited self-dealing misconduct. Under this backdrop, together Defendants and Cigna concocted an intricate scheme to transfer and embezzle plan funds.”
According to the complaint, DHL and their parent company, colluded with CIGNA: “in spite of the glaring conflict of interest and inherent breach of fiduciary duties, Defendants agreed to an unlawful compensation structure that financially rewards Cigna for wrongfully denying and underpaying benefits claims. Under this backdrop, together Defendants and Cigna concocted an intricate scheme to transfer and embezzle plan funds.”
Additionally, the alleged scheme by DHL and Cigna left patients responsible for more than their designated share of the cost under the terms of the health care plan, “resulting in an arrangement where Cigna, a co-fiduciary, reprehensively competes with the Plan’s own beneficiaries for entitlement to plan funds.”, according to the lawsuit.
Case info: Center for Advanced Surgical Treatment v. DHL Express and Robert Whitaker in the United States District Court for the Southern District of Texas, Houston Division, Case Number: 4:16 cv01919; Filed June 30, 2016.
This latest case seems to be another brick in the wall of ongoing cases, alleging similar violations, against CIGNA administered health plans across multiple sectors of the economy. Among top companies ensnared in litigation by CIGNA’s practices include household names such as Macys, JP Morgan Chase and Chevron. These practices may be endemic to the industry as a whole as evidenced by other large UnitedHealth administered health plans, such as GAP and AT&T that have also faced lawsuits alleging similar violations.
The complaint further alleges that DHL had complete and full knowledge of the possible scheme but not only refused to conduct an investigation, consistent with its fiduciary duty, but actually delegated the investigation to the fiduciary CIGNA, the alleged perpetrator of the embezzlement!
According to court documents:
“Despite actual knowledge of Cigna’s self-dealing misconduct stemming from repeated alerts and warnings from Plaintiff’s official ERISA Appeals, Defendants systematically refused to take corrective action, and instead, DELEGATED INVESTIGATION OF THE SUSPECTED WRONGDOING TO CIGNA [emphasis added]”- the identified perpetrator of the misconduct.”
And, in a particularly reprehensible move, the complaint further alleges that the plans and their co-fiduciary Cigna may have intentionally misrepresented to the patients, through the EOB’s, the actual amount that was covered and paid on the claims.
The complaint alleges: “According to the explanation of benefits that was sent to the Patient, it appeared that all of the charges were denied in error and the total amount of the charges covered was $200,355.00. However, this amount was never paid to Plaintiff, but was kept by Cigna.”
The latest DHL lawsuit, which was filed on June 30, 2016, comes on the heels other recent lawsuits involving Cigna and Cigna Administered ERISA health plans:
As we have mentioned many times before, all ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases. Health plans must be proactive in ensuring benefits are adjudicated and ultimately paid solely based on the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Medical providers must be also proactive and adopt compliant practices and policies. Patients must understand their benefits plans and their rights as allowed under ERISA.
Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.