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Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 1 of 66 PageID: 1
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`K&L GATES LLP
`One Newark Center, Tenth Floor
`Newark, New Jersey 07102
`Tel: (973) 848-4000
`Fax: (973) 848-4001
`Attorneys for Plaintiffs
`Hudson Hospital OPCO, LLC, d/b/a CarePoint Health—Christ Hospital; IJKG,
`LLC, IJKG PROPCO LLC and IJKG OPCO LLC, d/b/a CarePoint Health—
`Bayonne Medical Center; and HUMC OPCO LLC, d/b/a CarePoint Health—
`Hoboken University Medical Center
`
`
`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
`
`
`
`HUDSON HOSPITAL OPCO, LLC—d/b/a
`CAREPOINT HEALTH—CHRIST
`HOSPITAL, IJKG, LLC; IJKG PROPCO
`LLC and IJKG OPCO LLC d/b/a
`CAREPOINT HEALTH—BAYONNE
`MEDICAL CENTER; and HUMC OPCO
`LLC d/b/a CAREPOINT HEALTH—
`HOBOKEN UNIVERSITY MEDICAL
`CENTER,
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`v.
`
`
`
`Hon. ___________, U.S.D.J.
`
`Hon. ___________, U.S.M.J.
`
`Civil Action No.
`
`
`
`
`
`
`
`
`
`COMPLAINT AND
`JURY DEMAND
`
`
`CIGNA HEALTH AND LIFE
`INSURANCE COMPANY and
`CONNECTICUT GENERAL LIFE
`INSURANCE COMPANY,
`
`
`
`
`
`
`
`
`
`
`
`Defendants.
`
`
`
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`
`

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`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 2 of 66 PageID: 2
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`For their Complaint against Defendants, Cigna Health and Life Insurance
`
`Company (“Cigna Health”) and Connecticut General Life Insurance Company
`
`(“Connecticut General”) (collectively, “Defendants” or Cigna”), Plaintiffs Hudson
`
`Hospital OPCO, LLC d/b/a CarePoint Health—Christ Hospital (“Christ Hospital”),
`
`IJKG, LLC, PROPCO LLC and IJKG OPCO LLC d/b/a CarePoint Health—
`
`Bayonne Medical Center (“BMC”), and HUMC OPCO LLC d/b/a CarePoint
`
`Health—Hoboken University Medical Center (“HUMC”), (collectively, the
`
`“CarePoint Hospitals”), by and through their attorneys, K&L Gates LLP, hereby
`
`allege as follows:
`
`INTRODUCTION
`
`1.
`
`This is an action under the Employee Retirement Income Security Act
`
`(“ERISA”), 29 U.S.C. § 1001 et seq., and state law, based on Defendants’ failure
`
`and ongoing refusal to pay in full for health care services, including services
`
`related to COVID-19, that the CarePoint Hospitals provided to patients covered by
`
`the Plans provided or administered by Defendants’ (“Defendants’ Subscribers” or
`
`“Cigna’s Subscribers”).
`
`2.
`
`Plaintiffs are local, hospital-based, emergency medical care providers.
`
`As emergency medical care providers, the Plaintiffs are essential workers on the
`
`front lines of the patient emergencies and, importantly, pandemic response.
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`

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`3.
`
`Plaintiffs’ claims arise in part from Defendants’ intentional and
`
`unlawful pattern of drastically underpaying and/or refusing to pay the CarePoint
`
`Hospitals, which were out-of-network with Defendants before June 1, 2021, for
`
`claims submitted to Defendants for medical treatment provided to patients.
`
`4.
`
`Cigna provides health care insurance, administration, and/or benefits
`
`to insureds or plan participants pursuant to a variety of health care benefit plans
`
`and policies of insurance, including employer-sponsored benefit plans and
`
`individual health benefit plans (“Cigna Plans”).
`
`5.
`
`As shown further below, in violation of their duties under ERISA and
`
`state law, Defendants have failed and refused to pay in full for health care services
`
`that the CarePoint Hospitals provided to Defendants’ Subscribers.
`
`6.
`
`During the period from approximately March 15, 2016, through May
`
`31, 2021 (“the Claim Period”), the CarePoint Hospitals provided hospital services
`
`in connection with 10,650 patient visits by Defendant’s Subscribers.
`
`7.
`
`For 8,083 patient visits by Defendants’ Subscribers, Cigna either did
`
`not pay or underpaid for hospital services provided by the CarePoint Hospitals (the
`
`“Underpaid Claims”) during the Claim Period as follows:
`
`a.
`
`During the Claim Period, Christ Hospital provided hospital
`
`services relating to approximately 2,579 patient visits by Cigna Subscribers.
`
`Of
`
`those patient visits:
`
` 1,808 were
`
`for emergency/urgent care
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`(“Emergency”); and 771 were for non-emergency/non-urgent (“Elective”)
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`care within the scope of the out-of-network benefits provided under the
`
`patients’ Plans.
`
`b.
`
`During the Claim Period, BMC provided hospital services
`
`relating to approximately 2,254 patient visits by Cigna Subscribers. Of
`
`those patient visits: 1,569 were for Emergency care; and 685 were for
`
`Elective care within the scope of the out-of-network benefits provided under
`
`the patients’ Plans.
`
`c.
`
`During the Claim Period, HUMC provided hospital services
`
`relating to approximately 3,250 patient visits by Cigna Subscribers. Of
`
`those patient visits: 2,678 were for Emergency care; and 572 were for
`
`Elective care within the scope of the out-of-network benefits provided under
`
`the patients’ Plans.
`
`8.
`
`The CarePoint Hospitals’ billed charges for the Underpaid Claims
`
`during the Claim Period total approximately $244,344,882, reflecting the
`
`CarePoint Hospitals’ usual and customary rates for the particular medical services
`
`provided, but Cigna underpaid each of these claims.
`
`9.
`
`Assuming an average patient responsibility (i.e., copayments,
`
`coinsurance, and deductibles) under the applicable Plans of ten percent (10%) of
`
`the charges for emergency/urgent care and thirty-percent (30%) of the charges for
`
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`Elective care, Cigna is responsible for $182,121,671 and $29,391,228 of the total
`
`underpaid charges, respectively; the grand total of Cigna’s responsibility for the
`
`Underpaid Claims is $211,512,899.
`
`10. However, to date, Cigna has paid the CarePoint Hospitals for only a
`
`portion of its responsibility for the Underpaid Claims - $76,155,427. The current
`
`unpaid balance due to the CarePoint Hospitals by Cigna is at least $135,357,472
`
`with respect to the Underpaid Claims.
`
`11. Defendants’ denials and underpayments to the CarePoint Hospitals on
`
`the Underpaid Claims are in clear violation of the terms of the Plans, as well as
`
`federal and state law.
`
`12. For example, the CarePoint Hospitals, like all hospitals, are prohibited
`
`by
`
`the Emergency Medical Treatment and Active Labor Act of 1986
`
`(“EMTALA”), 42 U.S.C. § 1395dd, from turning away women who are in active
`
`labor or any other persons in need of emergent/urgent medical treatment because
`
`of inability to pay or unavailability of insurance.
`
`THE PARTIES
`
`13. BMC is a privately held, limited liability company, organized under
`
`the laws of the State of New Jersey, with its principal place of business at 29th
`
`Street and Avenue E, Bayonne, New Jersey.
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`14. Christ Hospital is a privately held, limited liability company,
`
`organized under the laws of the State of New Jersey, with its principal place of
`
`business at 176 Palisade Avenue, Jersey City, NJ 07306.
`
`15. HUMC is a privately held, limited liability company, organized under
`
`the laws of the State of New Jersey, with its principal place of business at 308
`
`Willow Avenue, Hoboken, NJ 07030.
`
`16. Cigna Health is a corporation organized under the laws of the State of
`
`Connecticut, with its principal place of business at 900 Cottage Grove
`
`Road, Bloomfield, CT 06002.
`
`17. Cigna Health is in the business of underwriting, selling, and
`
`administering health benefit plans and policies of health insurance. Cigna Health
`
`provides benefits under a variety of health benefit plans, including individual
`
`health benefit plans and group plans, including employer-sponsored plans.
`
`18. Connecticut General is a corporation organized under the laws of the
`
`State of Connecticut, with its principal place of business at 900 Cottage Grove
`
`Road, Bloomfield, CT 06002.
`
`19. Connecticut General is in the business of underwriting, selling, and
`
`administering health benefit plans and policies of health insurance. Connecticut
`
`General provides benefits under a variety of health benefit plans, including
`
`
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`individual health benefit plans and group plans, including employer-sponsored
`
`plans.
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`JURISDICTION AND VENUE
`
`20. This Court has federal question subject matter jurisdiction over this
`
`matter pursuant to 28 U.S.C. § 1331, as the CarePoint Hospitals assert federal
`
`claims against Defendants, in Counts One, Two, and Three, under ERISA.
`
`21. This Court also has supplemental jurisdiction over the CarePoint
`
`Hospitals’ state law claims against Defendants, in Counts Four through Eight,
`
`because these claims are so related to the CarePoint Hospitals’ federal claims that
`
`the state law claims form a part of the same case or controversy under Article III of
`
`the United States Constitution. The Court has supplemental jurisdiction over these
`
`claims pursuant to 28 U.S.C. § 1367(a).
`
`22. This Court has personal jurisdiction over Cigna because Cigna carries
`
`on one or more businesses or business ventures in this judicial district; there is the
`
`requisite nexus between the business(es) and this action; and Cigna engages in
`
`substantial and not isolated activity within this judicial district.
`
`23. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2),
`
`because a substantial portion of the events giving rise to this action arose in this
`
`District.
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`FACTUAL ALLEGATIONS
`
`A.
`
`The CarePoint Hospitals
`
`24. BMC is a 244-bed, fully accredited, acute care hospital that provides
`
`quality, comprehensive, community-based health care services to more than 70,000
`
`people annually. The hospital includes a comprehensive inpatient and outpatient
`
`programs in such areas as: cardiology, medical and radiation oncology, emergency
`
`services, diagnostic laboratory, radiology, surgery, senior services, psychiatric and
`
`more. The facilities include 205 medical/surgical beds, 10 obstetrical beds, 14
`
`adult ICU/CCU beds, and 15 adult, acute open psychiatric beds. The Emergency
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`Department includes 23 full-service emergency room bays.
`
` The service
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`complement consists of 6 inpatient operating rooms, 2 cystoscopy rooms, full-
`
`service cardiac catheterization lab, full-service vascular lab, Vein Institute, Acute
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`Dialysis service, 1 MRI unit, emergency angioplasty services, elective angioplasty,
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`2 hyperbaric chamber units, Linear Accelerator and a PET-CT diagnostic imaging
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`unit.
`
`25. Christ Hospital is a 349-bed fully accredited acute care hospital. With
`
`a highly-qualified medical team — including more than 500 doctors with
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`specialties ranging from allergies to vascular surgery — Christ Hospital offers a
`
`full spectrum of services and has been recognized for excellence in cardiovascular,
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`neuroscience, respiratory, and medical/surgical care. As a state-certified and Joint
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`Commission Accredited Stroke Center and Primary Angioplasty Center, Christ
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`Hospital provides lifesaving emergency interventions with outcomes that rank
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`among the best in New Jersey. Christ Hospital was recently ranked as #1 for
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`equitable care in the country by the prestigious Lown Institute. Christ Hospital is
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`affiliated by common ownership with the principal owners of BMC and HUMC.
`
`26. HUMC is a 348-bed fully accredited general acute care hospital.
`
`HUMC provides advanced medical technologies in support of its medical staff,
`
`nursing team, and other caregivers, to enable state-of-the-art care to citizens of
`
`Hoboken and the surrounding communities. HUMC offers excellence in
`
`emergency medicine in the 34-bay emergency room and the dedicated OB/GYN
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`ED; inpatient rehabilitation; transitional care; child and adult behavioral health;
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`women’s care; wound care; and numerous surgical subspecialties. The American
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`Heart and Stroke Association awarded the Silver Award to HUMC for its
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`dedication to improving quality of care for stroke patients. Overall, HUMC was
`
`ranked in the top ten hospitals in New Jersey for care quality among all hospitals in
`
`the state with 350 beds or fewer. HUMC is affiliated by common ownership with
`
`the principal owners of BMC and Christ Hospital.
`
`27. Between 2008 and 2012, each of the CarePoint Hospitals was
`
`purchased out of bankruptcy. The owners then invested substantial time, effort and
`
`capital into improving the hospitals’ finances, physical plant, equipment, and
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`overall quality of the healthcare services they provide. Setting aside the
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`immeasurable benefit of improved health care for the patient communities, the new
`
`owners’ efforts to rescue these hospitals from bankruptcy have generated huge
`
`economic benefits to Hudson County and the State of New Jersey.
`
`28. During the Claim Period, the CarePoint Hospitals operated as for-
`
`profit hospitals and, as such, were not eligible for tax exempt status as charitable
`
`organizations.
`
`29. Also during the Claim Period, the CarePoint Hospitals received no
`
`federal or state government payments for patients who are undocumented aliens,
`
`the vast majority of whom are treated at urban hospitals. The hospitals could
`
`obtain partial payment for undocumented patients who agree to file a charity
`
`application, but many resisted out of fear of deportation.
`
`30. During the Claim Period, the CarePoint Hospitals were also paid far
`
`less than their costs for services provided to Medicare, Medicaid and Charity Care
`
`patients.
`
`31. Moreover, during the Claim Period, the CarePoint Hospitals continued
`
`to rank very high in the State of New Jersey in charity care as a percentage of total
`
`care provided. This data also reflected that the CarePoint Health System was the
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`largest Charity Care provider in Hudson County.
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`32. The CarePoint Hospitals and the independent physicians attending to
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`patients at the hospitals are required by law to provide emergency/urgent care to
`
`any patient regardless of the patient’s ability to pay and regardless of source of
`
`insurance payment. A patient’s ability to pay has never affected or impeded the
`
`CarePoint Hospitals’ delivery of emergency health care.
`
`B.
`
`The CarePoint Hospitals’ Out-of-Network Status Through May
`31, 2021
`
`33. Health care providers are either “in-network” or “out-of-network”
`
`with respect to insurance carriers. “In-network” or “participating” providers are
`
`those who contract with health insurers that require them to accept discounted
`
`negotiated rates as payment in full for covered services.
`
`34.
`
`“Out-of-network” or “non-participating” providers are those that do
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`not have contracts with insurance carriers to accept discounted rates and instead set
`
`their own fees for services based on a percentage of charges.
`
`35. New Jersey law does not specify how a hospital’s out-of-network
`
`charges must be determined. Rather, under New Jersey law, hospitals are
`
`permitted to set charges for various services and products as they see fit. N.J.S.A.
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`26:2H-18.51. Moreover, courts lack authority to review and adjust a hospital’s set
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`charges under New Jersey law. DiCarlo v. St. Mary Hospital, 530 F.3d 255 (3d
`
`Cir. 2008); Matter of Final Agency Decision by New Jersey Dep’t of Health
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`Regarding Utilization and Quality Review for Calendar Year 1993, 273 N.J. Super.
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`205, 226 (App. Div. 1994).
`
`36. Notably, all three of the CarePoint Hospitals were previously forced
`
`to seek bankruptcy protection because of inadequate in-network arrangements.
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`BMC, HUMC, and Christ Hospital were purchased out of bankruptcy by their then
`
`owners in 2008, 2011 and 2012, respectively.
`
`37. After being purchased out of bankruptcy, each of the CarePoint
`
`Hospitals was an out-of-network provider until June 1, 2021, when the CarePoint
`
`Hospitals entered into three separate Hospital Agreements and became in-network
`
`with Cigna.
`
`C.
`
`The CarePoint Hospitals’ Out-of-Network Status Was Well
`Known to Patients and the Public
`
`38. During the Claim Period, the CarePoint Hospitals prominently
`
`advised their patients and the public of their out-of-network status. The hospitals’
`
`websites directed, and continue to direct, patients to a webpage that lists the
`
`insurers with whom the hospitals are in-network and explains the difference
`
`between in-network and out-of-network providers, and how the hospitals bill
`
`insurers and patients.
`
`39. The CarePoint Hospitals’ Insurance Help Desks were at all relevant
`
`times, and remain, available to answer questions from patients and their billing
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`department was, and is, available to explain and review a patient’s bill, and discuss
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`payment options.
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`40. The CarePoint Hospitals also directed, and continue to direct, patients
`
`to contact their carrier to understand their out-of-network benefits.
`
`D. During the Claim Period, Cigna Subscribers Sought and obtained
`Emergency Medical Treatment from the CarePoint Hospitals
`
`41. As noted above, Plaintiffs were out-of-network with Cigna during the
`
`Claim Period.
`
`42. Notwithstanding the CarePoint Hospitals’ out-of-network status with
`
`respect to Cigna during the Claim Period, Cigna Subscribers received treatment
`
`from the CarePoint Hospitals’ emergency departments.
`
`43.
`
`Importantly, federal and New Jersey law obligate Plaintiffs, as
`
`emergency medical providers, to provide treatment to all patients who present at
`
`emergency departments. 42 U.S.C. § 1395dd; N.J.S.A. 26:2H-18.64.
`
`44. Among other things, EMTALA, and similar provisions of New Jersey
`
`laws and regulations, mandate that hospitals and the physicians that staff hospital
`
`emergency departments have a duty to provide an appropriate medical screening
`
`examination to all individuals who come to an emergency department with what
`
`they believe to be an emergent or urgent condition. 42 U.S.C. § 1395dd(a); N.J.S.A.
`
`26:2H-18.64; N.J.A.C. 8:43G-12.7(c).
`
`45.
`
`If it is determined that an emergency medical condition exists, the
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`patient must be evaluated by a physician and, with certain limited exceptions,
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`provided such medical treatment as is necessary to assure that the condition has
`
`been stabilized. 42 U.S.C. § 1395dd(b), (c); N.J.A.C. 8:43G-12.7(d), (e).
`
`46.
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`If it is determined that an emergency does not exist, the patient shall
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`either be treated in the emergency department or referred to an appropriate health
`
`care provider, and be given appropriate discharge instructions. N.J.A.C. 8:43G-
`
`12.7(f), (n).
`
`47. New Jersey regulations make clear that no patient who comes to a
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`hospital emergency department shall be discharged to home or another facility
`
`without being seen and evaluated by qualified medical personnel, which must occur
`
`within four hours of the patient’s coming to the emergency department. N.J.A.C.
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`8:43G-12.7(g).
`
`48.
`
`EMTALA and New Jersey law subject emergency department
`
`physicians to civil liability for violations. For example, “any physician who is
`
`responsible for the examination, treatment, or transfer of an individual in a
`
`participating hospital” who negligently violates EMTALA is subject to civil
`
`monetary penalties of up to $50,000 per violation. 42 U.S.C. §1395dd(d)(1)(B).
`
`49.
`
`There are no exceptions to the emergency medicine providers’ legal
`
`obligation to render services based on a patient’s ability to pay or the presence of
`
`health insurance. Notably, N.J.S.A. 26:2H-18.64 provides that “[n]o hospital shall
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`deny any admission or appropriate services to a patient on the basis of that patient’s
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`ability to pay or source of payment.” A patient’s ability to pay in no way affects or
`
`impedes the delivery of emergency care by Plaintiffs or the hospitals they staff.
`
`E. With Plaintiffs’ Duty to Treat Cigna Subscribers Comes Cigna’s
`Concomitant Duty to Pay Plaintiffs a Reasonable Rate for Out-of-
`Network Emergency Services
`
`50.
`
`Because emergency medical providers have no discretion to turn
`
`patients away, and must treat all patients, regardless of ability to pay, they depend
`
`on commercial insurance companies to meet their legal responsibility and timely
`
`and properly pay a reasonable rate to providers such as Plaintiffs who are not “in-
`
`network” and are not “participating” providers.
`
`51.
`
`The duty of healthcare insurers to pay a reasonable rate to out-of-
`
`network providers for the treatment they are required to provide to those insurers’
`
`subscribers derives not only from principles of fundamental fairness and equity,
`
`but also from multiple sources of federal and state law.
`
`1.
`
`Federal Coverage and Payment Mandates
`
`52.
`
`The Patient Protection and Affordable Care Act (“ACA”) added
`
`Section 2719A to the Public Health Services Act (“PHS Act”), 42 U.S.C. § 300gg-
`
`19a. Section 2719A requires any group health plan, or health insurer that provides
`
`or covers benefits with respect to services in an emergency department of a
`
`hospital, to cover any emergency services:
`
` without the need for prior
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`authorization; without regard to the provider’s status as an in-network or out-of-
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`network provider; and in a manner that ensures that the patient’s cost-sharing
`
`requirement (expressed as a copayment amount or coinsurance rate) is the same
`
`requirement that would apply if such services were provided in-network. 42
`
`U.S.C. § 300gg-19a(b)(1). These cost-sharing requirements are expressly
`
`incorporated into group health plans covered by ERISA. See 29 U.S.C. § 1185d(a)
`
`(certain provisions of the PHS Act, including Section 2719A, “shall apply to group
`
`health plans, and health insurance issuers providing health insurance coverage in
`
`connection with group health plans, as if included in this subpart”).
`
`53.
`
`For out-of-network emergent claims, Cigna must ensure that it pays at
`
`least the greatest of three amounts specified in Regulations promulgated pursuant to
`
`Section 2719A. 29 C.F.R. § 2590.715- 2719A(b)(3)(i)(A)-(C).
`
`54.
`
`These regulations provide that, to satisfy the ACA’s cost-sharing
`
`obligations, a non-grandfathered plan must pay the greatest of three possible
`
`amounts for out-of-network emergency services: (1) the amount negotiated with
`
`in-network providers for the emergency service, accounting for in-network co-
`
`payment and co-insurance obligations; (2) the amount for the emergency service
`
`calculated using the same method the plan generally uses to determine payments
`
`for out-of-network services (such as usual, customary and reasonable charges), but
`
`substituting in-network cost-sharing provisions for out-of-network cost-sharing
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`provisions; or (3) the amount that would be paid under Medicare for the emergency
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`service, accounting for in-network co-payment and co-insurance obligations. 29
`
`CFR § 2590.715-2719A(b)(3)(i)(A)-(C) (the “Greatest of Three regulation”).1
`
`ADD PARA. The ACA permits balance billing of the providers’ charges that
`
`exceed the allowable amount as long as there is no state prohibition on balance
`
`billing. 29 CFR § 2590.715-2719A(b)(3)(i).
`
`55. Moreover, the Families First Coronavirus Response Act (“FFCRA”)
`
`was enacted on March 18, 2020. Pub. L. No. 116-127 (2020). Section 6001 of the
`
`FFCRA generally requires group health plans and health insurers such as Cigna
`
`that offer group or individual health insurance coverage to provide benefits for
`
`certain items and services related to diagnostic testing for the detection and
`
`diagnosis of COVID-19, when those items or services are furnished on or after
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`March 18, 2020, and during the applicable period of the federal COVID-19 public
`
`health emergency declaration.2 Under the FFCRA, plans and health insurers must
`
`
`1 The “Greatest of Three” provision of the ACA was effectively superseded by
`provisions of the “No Surprises Act,” which went into effect on January 1, 2022.
`(No Surprises Act, H.R. 3630, 116th Cong. (2019)). “The No Surprises Act”
`amended section 2719A of the PHS Act to include a sunset provision effective for
`plan years beginning on or after January 1, 2022, when the new protections under
`the No Surprises Act take effect. See interim final regulations titled “Requirements
`Related to Surprise Billing; Part I,” (86 FR 36872, July 13, 2021).
`
`2 The Secretary of Health and Human Services most recently renewed the public
`health
`emergency
`under
`
`the
`FFCRA
`on
`July
`15,
`2022
`
`
`
`- 16 -
`
`

`

`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 18 of 66 PageID: 18
`
`provide this coverage without imposing any cost-sharing requirements (including
`
`deductibles, copayments, and coinsurance) or prior authorization or other medical
`
`management requirements.
`
`56. Additionally, the Coronavirus Aid, Relief, and Economic Security Act
`
`(the “CARES Act”) was enacted on March 27, 2020. Pub. L. No. 116-136 (2020).
`
`Section 3201 of the CARES Act amended Section 6001 of the FFCRA to include
`
`a broader range of diagnostic items and services that plans and health insurers
`
`such as Cigna must cover without any cost-sharing requirements or prior
`
`authorization or other medical management requirements. Section 3202 of the
`
`CARES Act generally requires plans and health insurers providing coverage for
`
`these items and services to reimburse any provider of COVID-19 diagnostic testing
`
`an amount that equals the negotiated rate or, if the plan or issuer does not have a
`
`negotiated rate with the provider, the provider’s published billed charges.
`
`2. New Jersey’s Prompt Payment Requirements
`
`57.
`
`For example, in processing Cigna’s claims, Cigna is governed by the
`
`prompt payment requirements of the New Jersey Health Claims Authorization,
`
`Processing and Payment Act (“HCAPPA”).
`
`58. HCAPPA’s requirements are codified in various sections of the New
`
`
`https://aspr.hhs.gov/legal/PHE/Pages/covid19-15jul2022.aspx (last visited July 25,
`2022).
`
`
`
`
`- 17 -
`
`

`

`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 19 of 66 PageID: 19
`
`Jersey Statutes, including, as applicable to Cigna, N.J.S.A. 17B:26-9.1 (applicable
`
`to health insurance other than group and blanket insurance), N.J.S.A.17B:27-44.2
`
`(applicable to group health and blanket insurance), and N.J.S.A. 26:2J-8.1(d)(9)
`
`(applicable to health maintenance organizations). Regardless of the nature of the
`
`payor and type of insurance, however, HCAPPA’s prompt payment requirements
`
`are the same.
`
`59. Under HCAPPA, the insurance carrier must acknowledge receipt of all
`
`claims, both emergent and non-emergent, within two working days. See N.J.S.A.
`
`17B:26-9.1(d)(5); N.J.S.A. 17B:27-44.2(d)(5) and N.J.S.A. 26:2J-8.1(d)(5).
`
`60. HCAPPA further requires insurance carriers to pay claims within 30
`
`days after the insurance carrier receives the claim when submitted electronically,
`
`or 40 days if received non- electronically, provided the following conditions apply:
`
`a.
`
`b.
`
`c.
`
`d.
`
`the healthcare provider is eligible at the date of service;
`
`the person who receives the healthcare service is covered on the
`date of service;
`
`the claim is for a service or supply covered under the health
`benefits plan;
`
`the claim is submitted with all the information requested by the
`payer on the claim form or in other instructions that is
`distributed in advance to the healthcare provider or covered
`person in accordance with the provisions of section 4 of
`P.L.2005, c. 352 (C.17B:30-51); and
`
`e.
`
`the payer has no reason to believe that the claim has been
`submitted fraudulently.
`
`
`
`- 18 -
`
`

`

`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 20 of 66 PageID: 20
`
`N.J.S.A. 17B:26-9.1(d)(1), 17B:27-44.2(d)(1) and N.J.S.A. 26:2J-8.1(d)(1).
`
`61.
`
`In addition, HCAPPA requires that, if all or a portion of the claim is
`
`not paid within the statutory timeframe for one or more statutorily enumerated
`
`reasons, the payer shall notify the health care provider and covered person in
`
`writing within 30 days of receipt of an electronic claim, or within 40 days of receipt
`
`of a claim submitted by other than electronic means, that: (i) the claim is incomplete
`
`with a statement as to what substantiating documentation is required for
`
`adjudication of the claim; (ii) the claim contains incorrect information with a
`
`statement as to what information must be corrected for the adjudication of the
`
`claim; (iii) the payer disputes the amount claimed in whole or in part with a
`
`statement as to the basis of that dispute; or (iv) the payer finds there is strong
`
`evidence of fraud and has initiated an investigation into the suspected fraud in
`
`accordance with its fraud prevention plan or referred the claim, together with
`
`supporting documentation, to the Office of the Insurance Fraud Prosecutor.
`
`N.J.S.A. 17B:26-9.1(d)(2); N.J.S.A. 17B:27-44.2(d)(2).
`
`62. Moreover, under HCAPPA, an insurance carrier’s dispute of a portion
`
`of the claim does not excuse the carrier from payment of the entire claim: “Any
`
`portion of a claim that meets the criteria established in paragraph (1) of this
`
`subsection shall be paid by the payer in accordance with the time limit established
`
`in paragraph (1) of this subsection.” N.J.S.A. 17B:26-9.1(d)(4), N.J.S.A. 17B:27-
`
`
`
`- 19 -
`
`

`

`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 21 of 66 PageID: 21
`
`44.2(d)(4) and N.J.S.A. 26:2J-8.1(d)(4).
`
`3.
`
`New Jersey’s Emergency Coverage Mandates
`
`63. New Jersey regulations also mandate that insurance carriers determine
`
`coverage promptly and pay promptly to ensure patient access to emergency care
`
`regardless of the patient’s type of insurance coverage. Under this regulatory
`
`regime, New Jersey law requires healthcare insurers to notify their subscribers that
`
`they are entitled to have “access” and “payment of appropriate benefits” for
`
`emergency conditions on a “24 hours a day,” “seven days a week” basis. N.J.A.C.
`
`11:24A-2.5(b)(2).
`
`64.
`
`Further, under New Jersey law prior to August 30, 2018, for the
`
`emergency/urgent treatment provided by Plaintiffs to Cigna Subscribers, insurers
`
`who provided coverage for emergency/urgent care and receive a claim for
`
`emergency/urgent care provided by an out-of- network hospital were required to
`
`pay an amount sufficient to protect the patient/insured from being balance billed.
`
`To meet this obligation, insurers could (a) pay the full amount of the charges, (b)
`
`negotiate a settlement of the claim with the provider, or (c) negotiate an in-network
`
`agreement with the provider. Aetna Health, Inc. v. Srinivasan, 2016 N.J. Super.
`
`Unpub. LEXIS 1515 (App. Div., June 29, 2016).
`
`
`
`- 20 -
`
`

`

`Case 2:22-cv-04964 Document 1 Filed 08/08/22 Page 22 of 66 PageID: 22
`
`4.
`
`The OON Act Modifies New Jersey’s Emergency Coverage
`Mandate, but Retains the Obligation for Insurers to Pay a
`Reasonable Rate
`
`65.
`
`The New Jersey Out-of-Network Consumer Protection, Transparency,
`
`Cost Containment and Accountability Act (“OON Act”), codified at N.J.S.A.
`
`26:2SS-1 to -20, modified HCAPPA’s prompt payment requirements for
`
`inadvertent or emergency claims upon taking effect on August 30, 2018. The OON
`
`Act applies to all health insurance plans in New Jersey other than self-funded plans
`
`governed by the federal Employee Retirement Income Security Act that have not
`
`opted into the law’s coverage.
`
`66.
`
`Specifically, under the OON Act, for inadvertent or emergency out-
`
`of-network payments, the insurer must make a determination within 20 days from
`
`the date of receipt of a claim for services whether i

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