CIGNA Out-Of-Network Claim Denials Implicate PPACA Non-Discrimination “Life Preserver” Protections

CIGNA Out-Of-Network Claim Denials Implicate PPACA Non-Discrimination “Life Preserver” Protections

A recent Federal 5th Circuit Court decision thwarted CIGNA’s potentially discriminatory “out of network protocol” policy against non-contracting providers and facilities. The decision allows properly assigned out-of-network providers Article III legal standing to sue and to challenge CIGNA’s potentially discriminatory “out of network protocol” under ERISA.

The 5th Circuit Appellate court questioned whether CIGNA’s denial of claims to Out of network providers who did not collect all patients’ deductibles and co-payments but NON denial of claims for in network providers who did the same (also known as CIGNA’s “fee-forgiving protocol” to reduce payments) violated ERISA anti-discrimination laws. According to the court:

 “Also relevant is whether Cigna denied all coverage to patients who were not charged or ‘billed’ for their copays or coinsurance by in-network providers.”

Health plan discrimination is not only wrong in principle, but is without justification based on the quality of health care provided by non-contracted providers. All patients should have the right to choose and be reimbursed for all health care services provided by non-contracted providers without impediments and limitations that unfairly restrict their freedom of choice. Anti‐competitive and discriminatory obstacles only serve to drive up costs, limit patient choice and erode the quality and necessity of health of care.

According to the Senate Committee on Appropriations Report dated July 11, 2013, “The goal of [section 2706 of the PHS act] is to ensure that patients have the right to access covered health services from the full range of providers licensed and certified in their State.”

Since its inception in 2010, the Patient Protection and Affordable Care Act (PPACA) claims regulation adopted longstanding ERISA claims regulations in their entirety for all health plans.

PPACA §2706 specifically prohibits plan’s discrimination against any health care providers solely based on their participation in plan TPA’s PPO networks with respect to health plan coverage when they are acting within the scope of their license under state laws. Section 2706 applies to all employee health benefit plans (insured and self-insured) and all health insurance policies.

Section 2706(a) of the Public Health Service Act preserves those protections by creating a federal provider non-discrimination provision that applies to all plans regulated by PPACA. Section 2706(a) prohibits insurance providers from discriminating, with respect to participation under the plan or coverage against health care providers acting within the scope of their state license of certification.


`(a) Providers- A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law.

`(b) Individuals—The provisions of section 1558 of the Patient Protection and Affordable Care Act (relating to non-discrimination) shall apply with respect to a group health plan or health insurance issuer offering group or in-dividual health insurance coverage.( page 97)

As established by this landmark 5th Circuit Court ERISA ruling, federal courts have clarified, for the first time, ERISA anti-discrimination protections for both in and out-of-network patients and providers. Furthermore, this court decision may have exposed a fundamental legal flaw in the nation’s managed care business model.

The implications of this case will reverberate across the healthcare industry. It will have profound ramifications for all professionals involved in healthcare including insurance carriers, medical providers, plan sponsors, plan administrators, TPA’s, attorneys and of course patients.

Avym Corporation promotes  new ERISA out-of-network specialist programs and litigation support services to assess, educate and comply with this appellate court ERISA decision. This decision is a true harbinger of things to come and can be used as a “crystal ball” to help understand alleged out of network fraud mysteries.

Avym Corporation provides comprehensive and in-depth assessments of this landmark decision and will demystify ERISA legalese for both non-lawyer healthcare providers and seasoned healthcare attorneys. This is a critical court decision, which addresses a typical scenario for out of network providers: refusal to pay claims then a catch-all, out of network lawsuit seeking complete overpayments based on broad and vague allegations of fraud.

Avym is dedicated to empowering providers with ERISA appeal compliance and ERISA litigation support in all cases as well as ERISA class actions.  All medical providers and Plans should understand several critical issues regarding the profound impact of this final court decision on the nation’s No. 1 health care claim denial – overpayment demand recoupment and offsetting; including how to correctly appeal every wrongful overpayment demand and subsequent claims offsetting with valid ERISA assignment and the first ERISA permanent injunction.  In addition, when faced with pending litigation and or offsets or recoupments, providers should look for proper litigation support against all wrongful overpayment recoupment and offsetting, to seek for enforcement and compliance with ERISA & PPACA claim regulations.

For more information or to contact AVYM





What is to be done about this?


Is it legal for some of the Big insurance carriers to produce there own letter of authorization for the patient to sign for a out of network physician to appeal on the patient’s behalf? We already have had patient sign an authorization of release to collect and/or appeal payments with there insurance carrier? So much red tape for an out-of-network provider to get paid. So sad. I’m just trying to do my job and take care of these claims…. especially UHC too many road blocks.

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