The scheme continues. Shared savings off imaginary numbers through PPO discounts negotiated in secret and subject to gag orders, effectively screws consumers by driving costs up. There have been numerous lawsuits in recent years against Cigna, Blue Cross, Aetna and others with pleadings summarizing identical complaints.
Plan sponsors are at extreme risk as evidenced by the following article by Mark Flores. As plan fiduciaries they are liable for potential lawsuits. Hungary attorneys and outraged consumer groups are beginning to take note – Molly Mulebriar, Waring, Texas
Article contributed by Jeff Bernhard, President of Continental Benefits
Cigna Administered ERISA Health Plan, Macys, Sued for Embezzlement, Issuing “Secret Checks”
Published on June 22, 2016
Mark Flores FollowMark Flores
Vice President and Co-Founder at AVYM Corporation
Macys Inc. and Plan administrator, Stephen J. O’Bryan, were sued and named as defendants in federal court for ERISA violations, for allegedly engaging in a “a systematic embezzlement and/or conversion scheme involving the Plan Assets of the Plan“. This is the second lawsuit filed against Cigna Administered ERISA health plan Macy’s in less than a month.
According to the complaint, “Cigna issued a payment check to Plaintiff to satisfy a claim filed by Plaintiff for services performed on a patient, who is a Plan Beneficiary of Defendants;
however, in addition to issuing a check to Plaintiff, Cigna issued a secret check to itself for the same amount. Cigna then cashed the secret check it issued to itself, and then placed a stop on the check issued to Plaintiff before Plaintiff could receive and cash the check to reimburse itself for services performed on Defendants’ Plan Beneficiary“
The complaint further alleges that “Cigna also issued deceptive and inconsistent documents to Plaintiff and the Patient-Plan Beneficiary, specifically the Provider Explanation of Medical Payment, Provider Explanation of Medical Payment Report, Patient Explanation of Benefits, and Cigna Claim Details Sheet.“.
According to the court documents,
Macys, through Cigna, sent EOBs telling the hospital that it would not get paid until it provided proof the patient paid their entire out-of-pocket costs, at the same time, according to the complaint, Macys, through Cigna, sent a different EOB to its member patients telling them they owed nothing!
Case info: REDOAK Hospital, LLC v. Macys Inc., Welfare Benefits Plan and Stephen J. O’Bryan Case Number: 4:16-cv-01783 in the United states District Court for the Southern District of Texas, Houston office Court, Filed June 21, 2016.
The complaint also alleges that Macys and Cigna engaged in a complicated scheme involving “fabricated” Viant repricing discounts. According to the court documents:
“In addition to the “fee-forgiveness scheme”, Defendants and Cigna also concocted another intricate scheme to abstract and embezzle Plan Assets. Abstraction of the Plan Assets are concealed by processing Plaintiff’s out-of-network claim under a fabricated Viant Repricing Discount, even though Defendants and Cigna are fully aware of the fact that no such contract exists between Plaintiff and Viant.
The complaint goes on to allege“Defendants allowed Cigna to convert the full Viant discounted amount from patient-Plan Beneficiary’s Allowed Amount to Cigna’s own use, all while concealing and intentionally misrepresenting to patient-Plan Beneficiary that [it] has converted the Viant discounted amount through informing patient-Plan Beneficiary that the Viant Discount is $0.00.”
Also, according to court documents, the member is ultimately left holding the bag:
“As a result of the wrongful claim denial schemes concocted by Defendants and Cigna, all of the transferred Plan Assets are ultimately misappropriated by Cigna to fraudulently pay itself with Defendants’ withdrawn Plan Assets by falsely declaring the converted Plan Assets as compensation for itself generated through managed care and out-of-network cost containment “savings”, when in truth and in fact, the claim was never paid to Plaintiff and the patient-Plan Beneficiary is left exposed to personal liability for the full amount of his unpaid medical bills.”
This lawsuit against Macys and its plan administrator, which was filed on June 21, 2016, comes on the heels of two other recent lawsuits involving Cigna and Cigna Administered ERISA health plans:
- an unprecedented $13.7M ruling against CIGNA, filed on June 1, 2016, with $11.4M for underpaid claims and an additional $2.3M in statutory penalties. In that case, CIGNA’s fee forgiving protocol and claim for reimbursement of “overpayments” came under fire by the courts, ultimately ruling that CIGNA’s interpretation of plan’s “exclusionary language” provision as the basis for it’s fee forgiving protocol, was “flawed” and “legally incorrect“. The court also ruled that CIGNA’s claim for reimbursement of overpayments “fail as a matter of law” reasoning no lien or constructive trust was created and tracing requirements were not met.
- eight days later, on June 9, 2016 over 100 of CIGNA’s self-insured clients, along with their Plan Administrators were named as defendants in a massive fraud lawsuit,alleging the plans “participated in a conspiracy and pattern of unlawful, reckless, and deceptive conduct to conceal an embezzlement and/or skimming scheme”
As we have mentioned many times before, all ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases. The courts have provided clear guidance regarding Cigna’s “fee forgiving protocol” which has been a thorny issue for out-of-network providers across the nation and now, self-insured plans are starting to feel the pain of these potentially illegal practices. To read the full article and learn more about the case and Avym services, click HERE.
