Cigna Hit With Lawsuit Over Home Health-Care Service Charges

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

Cigna Health & Life Insurance Co. is accused of engaging in a fraudulent scheme to artificially inflate medical costs, causing customers to pay more than they should have paid for medically necessary home patient care ( Neufeld v. Cigna Health & Life Ins. Co. , D. Conn., No. 3:17-cv-01693, complaint filed 10/6/17 ).

Cigna allegedly developed and directed a fraudulent billing scheme through its health insurance plans that required benefit managers such as CareCentrix Inc. to charge patients excessive copayments, coinsurance, or deductible payments, according to a lawsuit filed Oct. 6 in federal court in Connecticut.

The lawsuit was filed by a plan participant who allegedly paid almost 350 percent more than what he should have for a disposable filter to treat sleep apnea—a disorder in which the patient’s breathing is interrupted during sleep. The participant bought the disposable filter from J&L Medical Services, an authorized CareCentrix provider. He was required to pay $25.68 as a deductible, but J&L had contracted with Cigna and CareCentrix to provide the filter for only $7.50. The remaining $18.18 was allegedly hidden from the participant and pocketed by Cigna, the lawsuit said.

Cigna violated the plan and breached its fiduciary duties under the Employee Retirement Income Security Act by secretly determining that the participants had to make inflated deductible payments and secretly collecting those payments, the lawsuit alleged.

CareCentrix is a provider of home patient care and durable medical equipment. After being retained by Cigna, the company has established a network of more than 9,000 providers to administer these products and services to patients.

The lawsuit comes almost one year after Cigna was hit with three lawsuits over an alleged fraudulent overcharging scheme that caused participants to pay as much as 10 times the true cost of prescription drugs. Other major health insurance providers, including UnitedHealth Group Inc. and Humana Inc., are also defending against similar claims.

According to the latest lawsuit, Cigna also violated the Racketeering Influenced and Corrupt Organizations Act by allegedly using the mail and interstate wire facilities to engage in the fraudulent billing scheme.

The participant seeks class treatment for thousands of other patients across the country.

Cigna doesn’t comment on litigation matters, a company spokesman told Bloomberg BNA Oct. 10.

Izard Kindall & Raabe LLP, Motley Rice LLC, and Sarraf Gentile LLP represent the participant.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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