Cigna prevails in Texas hospital's suit over $50M in unpaid claims

Cigna defeated a lawsuit filed by North Cypress (Texas) Medical Center accusing the insurer of underpaying medical benefit claims, according to Bloomberg Law.

Here are six things to know about the case:

1. In its long-running lawsuit against Cigna, North Cypress Medical Center sought to recover at least $50 million in unpaid claims.

2. The hospital filed the lawsuit after Cigna reduced benefit payments to the hospital. Cigna said it reduced payments because the hospital was engaging in fee-forgiving, a process in which out-of-network hospitals charge patients less than what they owe under their health insurance plans, according to the report.

3. In 2016, Judge Keith P. Ellison, who sits in the U.S. District Court for the Southern District of Texas, made several dispositive rulings in the case, including that Cigna violated federal law when it denied full payment of benefit claims. Both parties appealed, and the appellate court remanded the case to give the district court the opportunity to consider all of the hospital's underpayment claims "with a fully developed record."

4. After the parties finished full discovery, there were 575 benefit claims at issue. At trial, Cigna said it didn't reduce payments for 395 of those claims, leaving 180 claims at issue in the case.

5. On Aug. 7, Mr. Ellison ruled Cigna did not abuse its discretion when it reduced payment for the benefit claims. He held that Cigna's interpretation of its insurance plans to require an out-of-network provider to collect the full coinsurance payment due from a patient was reasonable, and that Cigna had ample evidence to support its determination that the hospital engaged in fee-forgiving, according to the report.

6. Mr. Ellison's ruling came after the U.S. Court of Appeals for the Fifth Circuit issued opinions in favor of insurers in several similar cases.

Access the full Bloomberg Law article here.

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