Cigna Faces Consequences For Improper Claim Handling Practices

#Cigna is one of the nation’s largest providers of life, health, and long-term disability insurance. Cigna offers various types of insurance coverage and plans, including group universal life insurance, HMO plans, and administration of group dental and health benefit plans for employers.

Across the country, Cigna has been targeted by regulators and individual lawsuits for violating laws governing good faith payment of benefits and claims. As a result of its unfair claim handling, the company has been hit by multi-million-dollar judgments and #administrativefines.

Cigna’s reputation is that of a corporation often found to be denying the fair payment of claims. The most noteworthy example was that of a lawsuit spanning multiple states which alleged that Cigna had improperly handled thousands of claims. Cigna eventually agreed to revise its claim-handling practices and pay out up to $77 million to affected claimants across the country.

How Cigna Exhibits Bad Faith When Handling Claims

There are many reasons that Cigna and other insurers offer when #denyingclaims. In some cases, these reasons provide a valid basis for the denial of a claim. Often, they are used as ways to get a claimant to abandon their pursuit of benefits, thus potentially saving the insurer from paying out thousands or tens of thousands of dollars in benefits. Common reasons for bad faith claim denials include:

• Policy lapse from failure to pay premiums.
• An insurer’s claim that the condition pre-existed the point when coverage began.
• The claimant included materially false information in their application or failed to include material information about the claimant’s health history, justifying rescission of the policy.
• The claim is excluded from coverage under the terms of the policy.
• The claimant is not as incapacitated as they claim, based on information provided by private investigators.
• The claimant failed to provide evidence of the claim by deadlines listed in the policy.

Patients, Doctors Sue to Hold Cigna Accountable for Denials and Underpayments

In an effort to shed light on misconduct by one of the nation’s largest health insurance plans, patients and physicians have filed a proposed class-action lawsuit alleging the company intentionally denied and underpaid patients’ medical claims. #Cigna #administrativefines #denyingclaims

The Litigation Center of the AMA, the Medical Society of New Jersey (MSNJ) and the Washington State Medical Association (WSMA) in September of 2022 became plaintiffs in the lawsuit alleging that Cigna failed to pay the medical claims based on physicians’ contracts with MultiPlan Corp. Instead, Cigna applied its own, lower payment methodology for nonparticipating physicians and other health professionals. That move left patients exposed to balance billing for physician and other health service fees.

The AMA, MSNJ and WSMA allege that Cigna’s misconduct is riddled with conflicts of interest and manipulations that routinely shortchanged payments to MultiPlan Network physicians and interfered with the patient-physician relationship.

Claims Denials and Appeals in ACA Marketplace Plans

CMS requires insurers to report the reasons for claims denials at the plan level. Based on a study of in-network claims, about 14% were denied because the claim was for an excluded service, 9% due to lack of preauthorization or referral, and only about 2% based on medical necessity. Most plan-reported denials (82%) were classified as ‘all other reasons.

A claim might be denied for more than one reason. In addition, insurers are required to report reasons for denials of claims that ultimately are paid. In all, insurers reported 41.7 million denied in-network claims at the plan level for the 2022 coverage year. Insurers also reported 44.7 million reasons for denying in-network claims, including roughly 3 million denials of claims that were later paid.

Let the experts at CodeToolz take your contracting efforts from burden to competitive advantage. The bottom line is that in negotiations, knowledge is power and planning is essential. Contact Us Today! (512) 787-1852