The 10 Biggest Cigna Lawsuits in Company History
Cigna is a leading healthcare and insurance company in the United States of America. Other than the U.S., it operates in thirty other European countries, including Canada, Belgium, Denmark, Portugal, Germany, Spain, and others, as indicated in the Cigna Salud. The company has changed hands in terms of ownership from time to time, and currently, it is owned by New York Life which acquired it in 2019 at a fee of $46.3 billion.
The company’s headquarters have never moved with ownership, and they are still in Bloomfield, Connecticut, the U.S. In different locations, the company operates under subsidiaries that are expected to adhere to its performance standards. In health insurance, different entities have ranked it number 12 worldwide. The company had a net income of $5.4 billion in 2021. The large customer base of more than 8.4 million people has made it a target of genuine and scrupulous legal suits. In this article, we shall discuss the top 10 lawsuits in the history of the Cigna company.
10. Negron Versus Cigna Corporation, A case of Alleged Drug Overcharge
In 2016, the plaintiff went before a federal court alleging that the defendant had contracted pharmacies charging exorbitant fees to patients buying prescription drugs above the actual purchase costs, and in return, the insurer would ‘claw back ‘ the difference. Their legal arguments were based on the Racketeer Influenced and Corrupt Organizations Act and the Employee Retirement Income Security Act, in which they claimed they governed the alleged malpractices. The plaintiff was joined by others who wanted the matter to be certified as a class lawsuit.
However, a Federal Judge, Judge Jeffrey Meyer of the District Court of New Haven, Connecticut, in May 2021, declined to certify the matter as a class lawsuit because, in his opinion, if he did so, the lawsuit would encompass so many beneficiaries of the Cigna Plans that were not intended to be parties to the case. The judge termed the complaints as personal experiences that he could not equate to questions of legal misconduct by the insurer. In short, there was legal fear that the case would have opened a pandora box on who should or should not join the case.
9. Demand for a Retrial in an Unfair Termination Case
The Appellant (Miller) joined INA, a subsidiary of the Cigna Corporation, in 1975 as a Chief Financial Officer. After that, he served in several senior positions, including the INA’s Vice President and Director of the company’s Special Risks Facility. From 1984 Miller underwent several transfers, and in November of 1990, he was terminated because there were no other positions he could serve in. Miller went to court alleging that he was discriminated against based on his 58 years of age which is a contravention of the Age Discrimination in Employment Act.
During the trial at a district court, the presiding judge directed the jury that it could only return a verdict in favor of Miller if he successfully demonstrated that age was the only reason he was terminated. In his appeal, he managed to persuade the U.S. Court of Appeals, Third Circuit, that age was not the only reason because, during his service period, five other vacancies existed that he could have been considered for. The Appeals court judges agreed with him and ordered that there be a retrial.
8. Cigna Corporation Versus Amara, A Case of Introducing a New Retirement Benefits Plan
The case of Cigna Versus Amara (inter-alia) is one of the most fought cases by the company. The matter originated from the plaintiff’s decision to change the terms and conditions of its employee’s retirement plan. Until 1998, Cigna provided a retiring employee with an annuity based on preretirement salary and the length of service. However, it introduced a new plan that replaced annuity with a cash balance based on a defined annual contribution from Cigna. The company translated already earned benefits under the old plan into an opening balance of the new plan. Amara and others went to District Court and sought relief and a declaration that it could only implement the new plan with future employees without interfering with the benefits accrued in the old plan.
Their prayers were granted, and the District Court agreed that they would likely suffer some harm from the new plan. The company moved to the Supreme court, alleging that the District Court had no powers to amend the plan and was only limited to determining whether the new plan was legal or not. However, the Supreme Court held that the position of the District Court was final and that the company had obligations to revert to the old plan when calculating retirement benefits for employees who had subscribed to the old plan. More details of the case are on Lexisnexis.com.
7. Jackey B. Griffiths Versus Cigna, Failure to Grant Promotion Based On Discriminative Grounds ($1.2 million)
The plaintiff joined the defendant’s company as a guard, and after several years of good performance, he felt he was ready to be considered for promotion. However, after several attempts, he failed to do so, and he filed a complaint with the U.S. Equal Employment Opportunity Commission (EEOC), alleging that he was discriminated against because he was a Jamaican. In May 1990, the company discharged him on the allegations that he had neglected to perform his duties properly, leading to the theft of electronic materials at his post.
He went to court seeking payment for wrongful dismissal and demanded to be heard by a grand jury. On April 11, 1994, the jury ruled in his favor. According to Justice, Griffith was able to persuade the jury that he was terminated because he had filed a complaint against the company with the EEOC and not on underperformance. The jury awarded him $485,000 as damages for wrongful dismissal and applied a punitive fee of $750,000 on the company.
6. Rochelle Park on Behalf of Open MRI, N.J. Versus the Cigna, A Claim of $1.5 million Unpaid COVID-19 Treatment Claims
When COVID-19 struck the world, the plaintiff started offering radiology services to COVID-19 patients in the hope that Cigna Health Plan would pay for it. However, after submitting the bill, which had accrued to $1.5 million, Cigna failed to pay, claiming that its initial health plan did not cater to COVID-19 patients. The matter was first filed in 2020 and was dismissed because Open MRI did not prove that patients had been assigned their rights to coverage of their existing Cigna plans.
However, in June 2022, Judge Kevin McNulty readmitted the case and allowed it to proceed after the plaintiff amended the original complaint and clarified that he had received direct instructions from Cigna patients to sue. While granting the motion to proceed, the judge believed any new law introduced due to the COVID-19 Pandemic did not intend to change the contents of existing health insurance plans but was made to reinforce them. The judge asserted that the services offered by the plaintiff did not deviate from the essential contractual obligations.
5. Lietz & Others Versus Cigna Corporation, Charging of Improper Administrative Fees ($8.25 million)
In May 2019, Cigna and American Specialty Health Group agreed to pay $8.25 million to settle a case filed in July 2016. Carol Lietz, together with others, filed a class lawsuit claiming that Cigna forced its members to pay illegal administrative fees to its subsidiary. The opinion of the plaintiffs was that paying administrative fees amounted to double payment because the initial plan had covered the same. According to the Top Class Actions, the affected members were those covered under the following services: massage therapy, chiropractic, acupuncture, naturopathy, physical therapy, and occupational therapy. After lengthy deliberations, Cigna agreed to pay the money without explicitly agreeing with the claims made by the plaintiffs.
4. Cigna Versus TVR Management and Others, Wrongful Medical Billing ($5.8 million)
In January 2020, Cigna sued three entities, TVR Management, Nandana Reddy Ponoka, and TVR Holdings, for submitting medical bills that did not reflect their claims’ actual records. The plaintiff asserted that, after an investigation, it was capable of establishing that some of the bills the defendants had submitted contained alleged services which they did not offer. Making the ruling in the U.S. District Court for the Northern District of Texas Dallas Division, the presiding judge Sidney Fitzwater awarded the plaintiff $5.8 million as damages. The monies were to be shared among the three defendants. It is also essential to note that the defendants could not produce medical records to prove that their claims were of any substance.
3. The Department of Justice (DOJ) Versus Cigna ($24.5 million)
In December 2002, Cigna agreed to pay $24.5 million to settle a case in which the DOJ had accused it of filing fraudulent Medicare reports. That was the most significant amount to be paid by a health insurance company in U.S. history. The claim emanated from falsified reports by Lovelace Health Systems, a subsidiary of Cigna. The Investigation by government officials focused on the hospital and its physician network.
According to the New York Times, those who were privy to the misconduct by Lovelace reported that the costs Lovelace was quoting were practically impossible and it was only a larger institution that could have only recorded them. Besides the large sums of money paid, this case is essential to all, for it reveals that before we go on to trust the financial position of any insurer, we must cross-check the facts they have laid before us.
2. Karp Versus Cigna, a Gender Discrimination Case ($100 million)
In March 20022, a veteran Cigna company’s managers sued it, alleging that it blocked female employees from getting promotions and better-paying jobs based on flimsy grounds. The plaintiff was later joined by other female employees who claimed the same, and the matter was admitted as a class lawsuit. In her court papers, Karp alleged that she was denied promotion because she appeared too aggressive when being interviewed for a promotion.
Together with other employees, they asserted that the company had an employee-evaluation system that discriminated against women and that this amounted to a violation of the U.S Civil Rights Act. According to Casetext, the judge hearing the matter, F. Denis Saylor IV of the United States District Court, allowed a prayer by the defendant to be allowed to settle the matter out of court. Up to today, the details of the final pay remain scanty. However, each party’s lawyers reported that they were satisfied with the settlement they had reached.
1. Department of Justice Versus Cigna, Submission of Fraudulent Medical Advantage Claims ($1.4 billion)
In one of the most decisive moves against Cigna, the DOJ filed a suit against the health insurance company in August 2020, claiming that Cigna had submitted fraudulent claims to the CMS. The DOJ alleged that between 2012 and 2017, the company used improper diagnostic codes for health conditions that its members did not have. Its inspectors could not authenticate the same from its medical records. The Center for Medicare and Medical Services, CMS, relies on these codes to make payments to insurers.
According to the DOJ, the CMS overpaid the insurer by $1.4 billion for the stated periods. The suit also alleged that Cigna had sought the services of other insurance providers unfamiliar with the program the patients it alleged to have covered had subscribed into. The program under contention was the 360-program introduced in 2012. The DOJ went to court seeking more than three times the amount paid to Cigna. However, the company promised to defend itself, claiming the accusations were false.
Healthcare and insurance are very delicate issues to handle in any given society. It has been one of the grounds on which some political elements win political offices in Europe. In addition, more academic research is being done on health services across different parts of the world, and every new finding will have a legal implication. Therefore, Cigna management should be aware that they shall continue to be a target of both local and foreign lawsuits. The company must take immediate measures to address any form of complacency by its employees, no matter how senior they are. However, as it continues to do so, it must appreciate that it is almost impossible to run away from legal challenges in totality.