Cigna Health and Life Insurance Co., filed a billing fraud suit in federal court attempting to recoup millions paid to 11 Indiana-based surgical centers allegedly participating in a "fee forgiveness" model to attract Cigna's out-of-network patients, according to a Law 360 report.
Here are five things to know about the suit:
1. Cigna claims the surgery centers attracted out-of-network members by reducing the members' copays and other fees but charging Cigna inflated prices to recoup losses, according to the report.
2. Cigna allegedly paid the 11 surgery centers more than $6.5 million in claims before realizing the centers were allegedly using the "fee-forgiving" model for out-of-network patients.
3. The insurance company stopped paying those ASCs and now requests the money returned and an injunction against attempts at similar "fee-forgiving" models in the future.
4. Cigna has gone to court in the past to stop out-of-network providers from attracting patients through fee forgiveness and is currently engaged in a suit with Health Diagnostic Laboratory in Virginia for similar reasons. Health Diagnostic Laboratory filed a $66 million counterclaim claiming Cigna refusing to pay until after members pay out-of-pocket is illegal.
5. The American Medical Association has warned against "fee-forgiving" and some states have laws against the practice. Cigna alleges the model violates the Employee Retirement Income Security and Racketeer Influenced and Corrupt Organizations Acts.