Health Insurer Secures Judgment Against Health Care Provider For Alleged False Claims

Health care providers have seen an increase in litigation and disputes with commercial payors.

On January 13, 2021, a federal district court in Dallas, Texas, entered judgment against two health care providers and their managers, awarding $5.8 million to Cigna Health and Life Insurance Company and its affiliates. According to Cigna's complaint, the company's special investigation unit had investigated the defendants for years, including unannounced onsite visits. Cigna then allegedly discovered that the defendants had submitted fraudulent claims to Cigna.

According to Cigna, the defendants' waiver of patient copayments, deductibles, and coinsurance obligations was a subterfuge designed to avoid Cigna's detection of the false claims. Cigna alleged the claims were also false because, among other things: (i) they contained altered medical diagnosis codes so that claims would be reimbursed at higher rates; (ii) certain medical records were inaccurate; or (iii) they were for services that were never rendered. When defendants failed to adequately respond to the complaint, the federal court entered its judgment.

The Cigna case is only the most recent in a line of cases brought by aggressive commercial insurers asserting allegations that health care providers have submitted false or fraudulent claims for payment. Such cases frequently have included legal theories very similar to those asserted by the government in cases brought under the federal False Claims Act (31 U.S.C. 3729, et seq.) and its state analogues. For example, Aetna, UnitedHealthcare, and Blue Cross & Blue Shield of Mississippi have all recently sued several health care providers alleging the submission of false claims for laboratory services. Complaints have asserted causes of action under civil RICO and common law fraud, among others, and sought millions of dollars in treble damages and attorneys' fees.

Particularly given the need to maintain ongoing working relationships with payors who process health care providers' claims, providers who believe that they are under investigation or have active disputes with commercial insurers should immediately contact counsel experienced with such disputes.

Originally published January 2021

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