Court Dismisses Cigna Overpayment Lawsuit Against Surgical Center after Self-Insured Plans were Counter-Sued

Court Dismisses Cigna Overpayment Lawsuit Against Surgical Center after Self-Insured Plans were Counter-Sued

On September 3, 2014, a California federal judge ruled in favor of a Los Angeles surgical center by dismissing with prejudice, Cigna’s overpayment lawsuit against La Peer Surgery Center after Cigna administered self-insured plans were counter-sued by the surgical center.  The dismissal came in spite of the fact Cigna prevailed over the provider’s motion to dismiss.

Cigna initially sued the surgical center in March 2013 for allegedly waiving collection of patient deductibles and co-insurance.  The court’s decision represents another surprising resolution to the escalating payor-provider court battles over payor overpayment claims for provider deductible waivers and also punctuated a speedy and effective resolution as the dismissal came less than 30 days after Lapeer’s counter claim against Cigna and many of the Cigna administered self-insured plans.  Surgery centers nationwide dealing with inappropriate overpayment demands and unauthorized payment offsets or recoupments should understand the importance of this case

The case is Cigna. v. La Peer Surgery Center, case number 2:13-cv-03726, in the U.S. District Court for the Central District of California.

On January 17, 2014, La Peer filed a motion to dismiss the amended complaint, arguing that because Cigna only administers the claims for the ERISA-governed plans: 1.Cigna did not use its own money to pay La Peer and is not seeking damages for itself, 2. Cigna must be a fiduciary to have standing under ERISA, a standard La Peer contends Cigna can’t meet.

On March 10, 2014, after a minutes-long hearing in Los Angeles, U.S. District Judge Christina A. Snyder issued a tentative ruling dismissing Cigna’s suit with leave to amend, saying Cigna couldn’t sue as a fiduciary of the health benefit plans because it was not in fact a fiduciary.

On August 7, 2014, following the filing of the amended complaint by Cigna, La Peer filed a counterclaim against CIGNA and many of the Cigna administered self-insured pans that were identified. The La Peer counterclaim against Cigna and the self-insured plans alleged Breach of Fiduciary Duty under 29 U.S.C.§1132(a)(2), seeking for Recovery of Benefits under 29 U.S.C. §1132(a)(1)(B) and Productions of Documents and Penalties under 29 U.S.C.§§ 1024(b), 1133(2), and 1132(c)(1) among other claims.

Among the self-insured plans countersued by La Peer were: A&E Television Networks, Akin Gump Strauss Hauer and Feld, AFTRA Health Plan, Anschutz Entertainment Group, Automobile Club of Southern California, Avnet, Inc., CBRE Services Inc., colony Advisors, LLC, Cornerstone OnDemand, Inc., David M. Lewis Company, LLC, Equity-League Health Trust Fund, Elliott Management Corporation, Forest City Enterprises, Inc., Hillstone Restaurant Group, Inc., Horizon Media, Inc., Jeffer, Mangels, Butler and Mitchell, LLP, Maritz Holdings, Inc., Marriot International, Inc., Morgan Stanley, NetApp, Inc., Newmont USA Limited, Omnicom Group, Inc., Orrick, Herrington & Sutcliffe, LLP, Pillsbury Winthrop Shaw Pittman, LLP, Richemont North America, Sullivan & Cromwell, LLP, The Walt Disney Company, Vubiquity Entertainment Corporation, William Morris Endeavor Entertainment, LLC, XL Reinsurance America, Inc. and Xceed Financial Credit Union.

On August 22, 2014 Judge R. Gary Klausner denied Cigna’s request for an extension to respond to La Peer’s counterclaim.  On September 3, 2014 Less than 30 days after La Peer’s counterclaim, the court dismissed Cigna’s case in its entirety with prejudice.

In response to the dismissal of Cigna’s case against La Peer, Avym Corporation announces new webinars devised to examine the implications of this case to Out of Network providers and facilities everywhere.  These webinars are designed to educate Out of Network providers and facilities in dealing with nationwide overpayment recoupment and offsetting practices by almost every insurance company and health plan, leaving many American workers and their families as well as their health care providers no protections as afforded under federal law ERISA.

Avym announces new webinars and advanced ERISA claim specialist programs in order to:

  • Demystify the profound impact of this court decision regarding the nation’s No. 1 health care claim denial – overpayment demand recoupment and offsetting;
  • Correctly appeal every inappropriate overpayment demand and subsequent claims offsetting with a valid ERISA assignment and the first ERISA permanent injunction;
  • Provide proper litigation support against all unauthorized and inappropriate overpayment recoupments and offsets, to seek for enforcement and compliance with ERISA & PPACA claim regulations;

Avym is headquartered in in Los Angeles, CA and is the leading provider of ERISA/PPACA health claim appeal services, reimbursement compliance, dead claims recovery services and ERISA/PPACA healthcare claim litigation support services.  To get more information or to contact Avym, click here.



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