Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 1 of 24
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS,
`CORPUS CHRISTI DIVISION
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`C.A. No. _____________________
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`DIAGNOSTIC AFFILIATES OF
`NORTHEAST HOU, LLC D/B/A 24
`HOUR COVIDRT-PCR LABORATORY
`ON BEHALF OF AND AS ATTORNEY
`IN FACT FOR PATIENT CS
`
`Plaintiff,
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`
`
`
`
`v.
`
`CIGNA HEALTH AND LIFE
`INSURANCE COMPANY, CIGNA
`HEALTH AND WALARE PLAN
`COMMITTEE, AND CIGNA MEDICAL
`PLAN
`
`Defendants.
`
`
`
`
`
`§
`
`§
`
`§
`
`§
`
`§
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`§
`
`§
`
`§
`
`§
`
`§
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`COMPLAINT AND JURY DEMAND
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`24 Hour Covid Diagnostic Affiliates of Northeast Hou, LLC d/b/a 24 Hour Covid RT-PCR
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`Laboratory (“24 Hour Covid” or “Plaintiff”) on behalf of Patient CS1 or, in the alternative, as the
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`attorney-in-fact for Patient CS, by and through its attorneys, brings its Complaint against Cigna
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`Health and Life Insurance Co. (the “Cigna TPA”), Cigna Health and Walare Plan Committee (the
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`“Cigna Medical Plan Committee"), and the Cigna Medical Plan (the Cigna TPA, the Cigna
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`Medical Plan Committee, and the Cigna Medical Plan shall be collectively referred to as the “Cigna
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`Defendants”), and allege as follows:
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`[INTENTIONALLY LEFT BLANK]
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`1 Patient CS’ identity shall be withheld from all public filings. Patent CS’ protected health information will be provided
`to the Court and to the Cigna Defendants under seal and/or upon request.
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`Page | 1
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 2 of 24
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`NATURE OF THE CLAIMS
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`1.
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`24 Hour Covid is a CLIA certified high complexity laboratory that has requested
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`emergency use authorization under Section 564 of the Federal Food, Drug, and Cosmetic Act;
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`therefore, has all authorizations and/or approvals necessary to render and be reimbursed for Covid
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`Testing services.2 At the height of the pandemic 24 Hour Covid operated seven specimen
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`collection sites located across the States of Texas and Louisiana, and partnered with employers
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`and independent school districts across Texas to render Covid Testing services to employees,
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`teachers, students, and other staff members.3
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`
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`2.
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`Cigna TPA serves in the trusted role of third-party claims administrator for self-
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`funded health plans, including its own employer sponsored health plan, the Cigna Medical Plan.
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`The Cigna Medical Plan Committee serves as the plan administrator for the Cigna Medical Plan.
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`All three are named Defendants in this Complaint.
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`
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`3.
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`Importantly, 24 Hour Covid does not have an in-network contract with the Cigna
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`TPA or any of its affiliated entities, nor has the Cigna TPA or any of its affiliated entities even
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`attempted to negotiate an amount to be paid to 24 Hour Covid for Covid Testing services despite
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`24 Hour Covid’s multiple attempts and offers to do so. Therefore, 24 Hour Covid is considered an
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`out-of-network (“OON”) laboratory with the Cigna TPA and any of its affiliated entities.
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`4.
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`Under ordinary circumstances, not all health plans administered by the Cigna TPA
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`offer its members with access to OON providers and facilities. However, pursuant to Section 6001
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`of the FFCRA, as amended by Section 3201 of the CARES Act, all group health plans and health
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`
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`2 See 21 U.S.C. § 360bbb–3.
`3 Humble ISD Expands Options for Student Covid Testing (https://www.humbleisd.net/covid19studenttesting);
`Humble
`ISD
`expands
`free COVID-19
`testing options
`to provide
`easier
`access
`for
`students
`(https://communityimpact.com/houston/lake-houston-humble-kingwood/education/2021/01/07/humble-isd-expands-
`free-covid-19-testing-options-to-provide-easier-access-for-students/).
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`Page | 2
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 3 of 24
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`insurance issuers offering group or individual health insurance coverage are required to provide
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`benefits for certain items and services related to diagnostic testing for the detection or diagnosis
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`of COVID-19 without the imposition of cost-sharing, prior authorization, or other medical
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`management requirements when such items or services are furnished on or after March 18, 2020,
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`for the duration of the COVID-19 public health emergency regardless of whether the Covid
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`Testing provider is an in-network or OON provider.4
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`5.
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`Furthermore, Section 3202(a) of the CARES Act provides that all group health
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`plans and health insurance issuers covering Covid Testing items and services, as described in
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`Section 6001 of the FFCRA, must reimburse OON providers in an amount that equals the cash
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`price for such Covid Testing services as listed by the OON provider on its public internet website
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`or to negotiate a rate/amount to be paid that is less than the publicized cash price.
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`6.
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`Here, the Cigna TPA initially failed to adjudicate Patient CS’ Covid Testing claim
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`in accordance with the requirements of Section 3202(a) of the CARES Act. Despite 24 Hour
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`Covid’s attempts to appeal this adverse benefit determination through the Cigna TPA’s internal
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`administrative appeals process, the Cigna TPA not only upheld its initial determination to
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`unlawfully process Patient CS’ claim but also failed to provide a sufficient response to 24 Hour
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`Covid’s appeal in violation of 29 CFR § 2560.503-1 and to provide requested documentation in
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`violation of 29 U.S. Code § 1132(c). 24 Hour Covid, on behalf of Patient CS, has fully exhausted
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`the Cigna TPA’s internal administrative appeals process.
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`
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`7.
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`Furthermore, because the Cigna Medical Plan Committee has contracted with the
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`Cigna TPA to act as its third-party claims administrator for the Cigna Medical Plan, the Cigna
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`4 See CMS FAQ Parts 42, 43, and 44, The FFCRA and the CARES Act.
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 4 of 24
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`Medical Plan Committee, through its silence and inaction, is dually liable for the Cigna TPA’s
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`violations of the FFCRA, the CARES Act, and ERISA pursuant to 29 U.S.C. § 1105(a).
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`PARTIES
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`8.
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`24 Hour Covid is a limited liability company organized under the laws of the State
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`of Texas, with its company headquarters located at 22751 Professional Drive, Suite 210,
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`Kingwood, Texas 77339. 24 Hour Covid, on behalf of Patient CS or, in the alternative, as the
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`attorney-in-fact of Patient CS, has lawful standing to bring in all claims asserted herein.
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`9.
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`Defendant Cigna Health and Life Insurance Co. (the “Cigna TPA”) is a corporation
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`organized under the laws of the State of Connecticut with its principal place of business in
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`Bloomfield, Connecticut. It is a foreign for-profit corporation operating in the State of Texas and
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`administers plans that are funded by plan sponsors in Texas. The Cigna Claims Administrator may
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`be served with process by serving its registered agent for service at CT Corporation System 350
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`North St Paul Street Dallas, TX 75201.
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`10.
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`Defendant Cigna Health & Walare Plan Committee (the “Cigna Health Plan
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`Committee”) is the committee identified by the Cigna Medical Plan to act as the Cigna Medical
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`Plan’s plan administrator.5 The Cigna Plan Administrator may be served with process by serving
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`Alicia Vaslow at 1601 Chestnut Street, TL05T, Philadelphia, PA 19192.
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`11.
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`Defendant Cigna Medical Plan is a self-funded health plan subject to ERISA. The
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`Cigna Health Plan may be served with process by serving Alicia Vaslow at 1601 Chestnut Street,
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`TL05T, Philadelphia, PA 19192.6
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`5 See Exhibit A (Cigna Health Plan Form 5500).
`6 Supra Footnote 5.
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`JURISDICTION AND VENUE
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`12.
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`This Court has federal question subject matter jurisdiction over this matter pursuant
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`to 28 U.S.C. § 1131, as 24 Hour Covid asserts federal claims against the Cigna Defendants in
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`Counts I, II, III, IV and V under the FFCRA, the CARES Act, and ERISA.
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`13.
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`The Court has personal jurisdiction over the parties because 24 Hour Covid submits
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`to the jurisdiction of this Court, and the Cigna Defendants systemically and continuously conduct
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`business in the State of Texas, and otherwise have minimum contacts with the State of Texas
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`sufficient to establish personal jurisdiction over them.
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`14.
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`Venue is appropriate under 29 U.S.C. § 1132 (e)(2), which requires that an ERISA
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`plan participant has the right to bring suit where he/she resides or where he/she alleges that the
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`violation of ERISA occurred. 24 Hour Covid alleges that the Cigna Defendants violated ERISA
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`within the District Court of Texas.
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`STATEMENT OF FACTS
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`I.
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`BACKGROUND AS TO THE FFCRA AND THE CARES ACT
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`15.
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`Pursuant to Section 319 of the Public Health Service Act, on January 31, 2020, the
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`Secretary of Health and Human Services (“HHS”) issued a determination that a Public Health
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`Emergency exists and has existed as of January 27, 2020, due to confirmed cases of COVID-19
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`being identified in this country.7
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`16.
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`On March 13, 2020, the President issued Proclamation 9994 declaring a National
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`Emergency concerning the COVID-19 outbreak with a determination that a national emergency
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`exists nationwide, pursuant to Section 501(b) of the Robert T. Stafford Disaster Relief and
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`Emergency Assistance Act.
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`7 See https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx (Determination that a Public
`Health Emergency Exists).
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`17.
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`To facilitate the nation’s response to the COVID-19 pandemic, Congress passed
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`the FFCRA and the CARES Act to, amongst other things, require group health plans and health
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`insurance issuers offering group or individual health insurance coverage to: (i) provide benefits
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`for certain items and services related to diagnostic testing for the detection or diagnosis of COVID-
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`19 without the imposition of any cost-sharing requirements (i.e. deductibles, copayments, and
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`coinsurance) or prior authorization or other medical management requirements;8 and (ii) to
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`reimburse any provider for COVID-19 diagnostic testing an amount that equals the negotiated rate
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`or, if the plan or issuer does not have a negotiated rate with the provider (e.g. 24 Hour Covid), the
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`cash price for such service that is listed by the provider on its public website in accordance with
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`45 CFR § 182.40.9
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`18.
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`To further clarify to issuers and health plans their legal expectations when
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`processing a claim for Covid Testing in accordance with the FFCRA and the CARES Act, the
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`Department of Labor (“DOL”), the Department of Health and Human Services (“HHS”), and the
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`Department of the Treasury (the “Treasury”) (collectively, the “Departments”) jointly prepared
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`and issued a series of Frequently Asked Questions (“FAQs”) to address any stakeholder questions
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`or concerns pertaining to the proper adjudication of Covid Testing claims. The following FAQs
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`summarize the health plan and issuers’ obligations as it pertains to covering and paying for Covid
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`Testing services during the public health emergency:
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`The Departments FAQ, Part 42, Q1: Which types of group health plans and health insurance
`coverage are subject to section 6001 of the FFCRA, as amended by section 3201 of the CARES
`Act?
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`Section 6001 of the FFCRA, as amended by section 3201 of the CARES Act, applies to group
`health plans and health insurance issuers offering group or individual health insurance coverage
`(including grandfathered health plans as defined in section 1251(e) of the Patient Protection and
`Affordable Care). The term “group health plan” includes both insured and self-insured group health
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`8 Pub. L. No. 116-127 (2020).
`9 Pub. L. No. 116-136 (2020).
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 7 of 24
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`
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`plans. It includes private employment-based group health plans (ERISA plans), non-federal
`governmental plans (such as plans sponsored by states and local governments), and church plans.
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`“Individual health insurance coverage” includes coverage offered in the individual market through
`or outside of an Exchange, as well as student health insurance coverage (as defined in 45 CFR
`147.145).10
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`The Departments FAQ, Part 42, Q3: What items and services must plans and issuers provide
`benefits for under section 6001 of the FFCRA?
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`Section 6001(a) of the FFCRA, as amended by Section 3201 of the CARES Act, requires plans and
`issuers to provide coverage for the following items and services:
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`(1) An in vitro diagnostic test as defined in section 809.3 of the title 21, Code of Federal
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`Regulations, (or its successor regulations) for the detection of SARS-CoV-2 or the diagnosis of
`COVID-19, and the administration of such a test, that - …
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`B. The developer has requested, or intends to request, emergency use authorization
`
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`under section564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb-3), unless and
`until the emergency use authorization request under such section 564 has been denied or the
`developer of such test does not submit a request under such section within a reasonable
`timeframe;…11
`
`The Departments FAQ, Part 42, Q6: May a plan or issuer impose any cost-sharing requirements,
`prior authorization requirements, or other medical management requirements for benefits that
`must be provided under section 6001(a) of the FFCRA, as amended by section 3201 of the CARES
`Act?
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`No. Section 6001(a) of the FFCRA provides that plans and issuers shall not impose any cost-sharing
`requirements (including deductibles, copayments, and coinsurance), prior authorization
`requirements, or other medical management requirements for these items and services. These items
`and services must be covered without cost sharing when medically appropriate for the individual,
`as determined by the individual’s attending healthcare provider in accordance with accepted
`standards of current medical practice.12
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`The Departments FAQ, Part 42, Q7: Are plans and issuers required to provide coverage for
`items and services that are furnished by providers that have not agreed to accept a negotiated rate
`as payment in full (i.e., out-of-network providers)?
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`Yes. Section 3202(a) of the CARES Act provides that a plan or issuer providing coverage of items
`and services described in section 6001(a) of the FFCRA shall reimburse the provider of the
`diagnostic testing as follows: …
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`2. If the plan or issuer does not have a negotiated rater with such provider, the plan or issuer
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`shall reimburse the provider in an amount that equals the cash price for such service as listed by
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`10 See https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.
`11 Id.
`12 Id.
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`the provider on a public internet website, or the plan or issuer may negotiate a rate with the provider
`for less than such cash price…13
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`The Departments FAQ, Part 43, Q9: Does Section 3202 of the CARES Act protect participants,
`beneficiaries, and enrollees from balance billing for a COVID-19 diagnostic test?
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`The Departments read the requirement to provide coverage without cost sharing in section 6001 of
`the FFCRA, together with section 3202(a) of the CARES Act establishing a process for setting
`reimbursement rates, as intended to protect participants, beneficiaries, and enrollees from being
`balance billed for an applicable COVID-19 test. Section 3202(a) contemplates that a provider of
`COVID-19 testing will be reimbursed either a negotiated rate or an amount that equals the cash
`price for such service that is listed by the provider on a public website. In either case, the amount
`the plan or issuer reimburses the provider constitutes payment in full for the test, with no cost
`sharing to the individual or other balance due. Therefore, the statute generally precludes balance
`billing for COVID-19 testing. However, section 3202(a) of the CARES Act does not preclude
`balance billing for items and services not subject to section 3202(a), although balance billing may
`be prohibited by applicable state law and other applicable contractual agreements.14
`
`The Departments FAQ, Part 44, Q1: Under the FFCRA, can plans and issuers use medical
`screening criteria to deny (or impose cost sharing on) a claim for COVID-19 diagnostic testing for
`an asymptomatic person who has no known or suspected exposure to COVID-19?
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`No. The FFCRA prohibits plans and issuers from imposing medical management, including
`specific medical screening criteria, on coverage of COVID-19 diagnostic testing. Plans and issuers
`cannot require the presence of symptoms or a recent known or suspected exposure, or otherwise
`impose medical screening criteria on coverage of tests.
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`When an individual seeks and receives a COVID-19 diagnostic test from a licensed or authorized
`health care provider, or when a licensed or authorized health care provider refers an individual for
`a COVID-19 diagnostic test, plans and issuers generally must assume that the receipt of the test
`reflects an “individualized clinical assessment” and the test should be covered without cost sharing,
`prior authorization, or other medical management requirements.15
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`The Departments FAQ, Part 44, Q3: Under the FFCRA, are plans and issuers required to cover
`COVID-19 diagnostic tests provided through state- or locality-administered testing sites?
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`Yes. As stated in FAQs Part 43, Q3, any health care provider acting within the scope of their license
`or authorization can make an individualized clinical assessment regarding COVID-19 diagnostic
`testing. If an individual seeks and receives a COVID-19 diagnostic test from a licensed or
`authorized provider, including from a state- or locality-administered site, a “drive-through” site,
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`
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`13 Id.
`14 See https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf; See also FAQ Part 43 Q12: … Because the
`Departments interpret the provisions of section 3202 of the CARES Act as specifying a rate that generally protects
`participants, beneficiaries, and enrollees from balance billing for a COVID-19 test (see Q9 above), the requirement to
`pay the greatest of three amounts under the regulations implementing section 2719A of the PHS Act is superseded by
`the requirements of section 3202(a) of the CARES Act with regard to COVID-19 diagnostic tests that are out-of-
`network emergency services. For these services, the plan or issuer must reimburse an out-of-network provider of
`COVID-19 testing an amount that equals the cash price for such service that is listed by the provider on a public
`website, or the plan or issuer may negotiate a rate that is lower than the cash price.
`15 See https://www.cms.gov/files/document/faqs-part-44.pdf.
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`and/or a site that does not require appointments, plans and issuers generally must assume that the
`receipt of the test reflects an “individualized clinical assessment.”16
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`The Departments FAQ, Part 44, Q5: What items and services are plans and issuers required to
`cover associated with COVID-19 diagnostic testing? What steps should plans and issuers take to
`help ensure compliance with these requirements?
`
` …
`
` Plans and issuers should maintain their claims processing and other information technology
`systems in ways that protect participants, beneficiaries, and enrollees from inappropriate cost
`sharing and should document any steps that they are taking to do so…17
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`19.
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`To supplement the FAQs publicized by the Departments, the Internal Revenue
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`
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`
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`Service (the “IRS”) issued Notice 2020-15 pertaining to high deductible health plans (“HDHPs”)
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`and expenses related to COVID-19 to provide members of HDHPs (including those HDHPs
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`administered by the Cigna TPA) the confidence that Covid Testing will be covered, in full, by their
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`HDHP. Notice 2020-15 states as follows:
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` [d]ue to the unprecedented public health emergency posed by COVID-19, and the need to
`eliminate potential administrative and financial barriers to testing for and treatment of
`COVID-19 [emphasis added], a health plan that otherwise satisfies the requirements to be
`an HDHP under section 223(c)(2)(A) will not fail to be an HDHP merely because the health
`plan provides medical care services and items purchased related to testing for and treatment
`of COVID-19 prior to the satisfaction of the applicable minimum deductible.
`
`
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`20.
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`In addition to the federal guidance publicized by the Departments, the Texas
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`Department of Insurance (“TDI”) issued Commissioner’s Bulletin # B-0017-20, which also
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`pertains to coverage for COVID-19 testing and network adequacy. In this Bulletin, TDI mandates
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`exclusive provider networks (“EPOs”) and health maintenance organizations (“HMOs”) to comply
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`with the Covid Testing adjudication requirements of the FFCRA and the CARES Act, and
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`“instructs health plans to pay a provider’s negotiated rate or, if a health plan does not have a
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`negotiated rate with the provider, pay the provider’s publicly available cash price for testing
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`[emphasis added].”18
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`
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`16 Id.
`17 Id.
`18 In an inquiry posed by 24 Hour Covid to TDI pertaining to the applicability of Commissioner’s Bulletin #B-0017-
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`II.
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`PATIENT CS’ COVID TESTING CLAIM
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`a.
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`History of Patient CS’ Claim
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`21.
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`Patient CS is a member of the Cigna Medical Plan, a self -funded health plan subject
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`to ERISA which mandates compliance with the FFCRA and the CARES Act.19 The Cigna Medical
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`Plan’s plan administrator is the Cigna Medical Plan Committee, and the Cigna Medical Plan’s
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`third-party claims administrator is the Cigna TPA.
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`22.
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`Patient CS visited a medical practice/physician on November 25, 2020 and
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`informed the medical practice/physician that he suffered from nasal congestion and had recently
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`come into contact with and had been exposed to an individual diagnosed with COVID-19. The
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`medical practice/physician determined that Covid Testing services for Patient CS was medically
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`necessary noting diagnosis codes Z20.828 (contact with and (suspected) exposure to other viral
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`communicable diseases) and R09.81 (nasal congestion) on Patient CS’ Covid Testing order form
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`to 24 Hour Covid.20 That same day, 24 Hour Covid collected Patient CS’ specimen and performed
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`the ordered test where Patient CS tested positive for COVID-19.21
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`23.
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`After all Covid Testing services were provided, 24 Hour Covid timely submitted
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`claims to the Cigna TPA for payment. 24 Hour Covid provided such services in good faith, and,
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`as such, reasonably expected a fair and timely payment in return from the Cigna Defendants. As
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`20 to PPO and POS plans, TDI states the following: “Yes, it is TDI’s position that PPO and POS plans must also
`comply with FFCRA and the ‘CARES Act’ … Commissioner’s Bulletin #B-0017-20 made it expressly clear that in-
`network based plans, “insurers offering exclusive provider networks (EPOs) and health maintenance organizations
`(HMOs)… fall within the federal definitions for group health plans or health insurance issuers offering group or
`individual health insurance coverage.” Presumably, the purpose of the bulletin was to expressly clarify for network-
`based plans such as EPOs and gated HMO plans our expectation to protect consumers regardless of network affiliation,
`as contemplated by the CARES Act and by Texas’ laws. PPO and EPO issuers are subject to but not limited to Texas
`Insurance Code (TIC) Chapter 1301. HMOs may issue POS plans as required under TIC Chapter 1273. As PPO and
`POS plans are captured under the terms “issuer”, “HMO”, “group health plans”, “health insurance issuers”, and
`“individual health insurance coverage”; PPO and POS plans are not excluded from compliance.”
`19 See Exhibit B (Patient CS’ Cigna Insurance Card).
`20 See Exhibit C (Patient CS’ Covid Testing Order Form).
`21 See Exhibit D (Patient CS’ COVID-19 Diagnostic Testing Laboratory Results)
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 11 of 24
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`detailed above, Section 3202(a) of the CARES Act requires health plans and issuers to pay OON
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`Covid Testing providers either their: (i) cash prices as publicized by the providers, or (ii) a
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`negotiated amount. Critically, 24 Hour Covid made a number of offers to the Cigna TPA and its
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`affiliated entities in attempt to negotiate an amount to be paid on Covid Testing claims, and, on
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`several occasions, even went as far as proposing to the Cigna TPA and its affiliated entities that it
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`agree to a rate 135% to 150% of the applicable Medicare fee schedule for all Covid Testing
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`services. However, all of 24 Hour Covid’s offers fell on deaf ears and were never responded to.
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`24.
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`Because the Cigna TPA failed to negotiate a rate to pay 24 Hour Covid for Covid
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`Testing services, Patient CS’ Covid Testing claim must have been adjudicated to reimburse 24
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`Hour Covid its cash price for services. The following illustrates how Patient CS’ Covid Testing
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`claim was improperly adjudicated:
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`[INTENTIONALLY LEFT BLANK]
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`25.
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`Not only has the Cigna TPA, as the third-party claims administrator for the Cigna
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`Medical Plan, failed to adjudicate Patient CS’ Covid Testing claim in compliance with Section
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`3202(a) of the CARES Act, but, through its failure to comply with this strict requirement, has left
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`Patient CS financially responsible for the balance between the amount paid by the Cigna TPA on
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`behalf of the Cigna Medical Plan and the billed amount/cash price. The manner in which the Cigna
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`TPA adjudicated Patient CS’ Covid Testing claim is in complete conflict with Congress and the
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`Departments’ intentions that no covered individual is to ever be left financially responsible for
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`Covid Testing services as it pertains to their cost-sharing and balance-billing obligations. 22
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`22 The Departments FAQ, Part 44, Q9:
`Does Section 3202 of the CARES Act protect participants, beneficiaries, and enrollees from balance billing for
`a COVID-19 diagnostic test?
`The Departments read the requirement to provide coverage without cost sharing in section 6001 of the FFCRA,
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 13 of 24
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`26.
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`The adverse benefit determination reason provided by the Cigna TPA for Patient
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`CS’ underpaid Covid Testing claim is also not entirely clear. In the Cigna TPA’s initial
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`adjudication of Patient CS’ claim, the Cigna TPA provides that the following reason for
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`underpayment:
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`“CO-45 – Charge
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`exceeds
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`fee
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`schedule/maximum
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`allowable or
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`contracted/legislated fee arrangement.”
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`27.
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`First, because 24 Hour Covid is an OON laboratory with the Cigna TPA, there is
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`no contract fee arrangement that the parties have agreed to that allow the Cigna TPA to unilaterally
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`underpay 24 Hour Covid. Second, any the Cigna TPA fee schedules/maximum allowables that
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`typically apply to OON providers is superseded by the reimbursement methodology prescribed by
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`Section 3202(a) of the CARES Act. Lastly, because Patient CS’ Covid Testing claim was not
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`adjudicated in accordance with Section 3202(a) of the CARES Act, no “legislated fee
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`arrangement” requirement was satisfied by the Cigna TPA.
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`b.
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`Exhaustion of the Cigna TPA’s Internal Administration Appeals Process
`and Failure to Provide Requested Information.
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`28.
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`Following the Cigna TPA’s initial adverse benefit determination of Patient CS’
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`Covid Testing claim, 24 Hour Covid submitted a Level 1 Appeal for Patient CS requesting the
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`Cigna Defendants to reimburse 24 Hour Covid in compliance with the FFCRA and the CARES
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`Act.23 As part of the appeal, the following requests/inquires were made to the Cigna Defendants:
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`(i) for Patient CS’ Covid Testing claim to be reprocessed in accordance with the requirements of
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`the FFCRA and the CARES Act; and (ii) in accordance with 29 CFR 2560.503-1(i)(5) and (j)(3),
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`together with section 3202(a) of the CARES Act establishing a process for setting reimbursement rates, as intended
`to protect participants, beneficiaries, and enrollees from being balance billed for an applicable COVID-19 test. Section
`3202(a) contemplates that a provider of COVID-19 testing will be reimbursed either a negotiated rate or an amount
`that equals the cash price for such service that is listed by the provider on a public website. In either case, the amount
`the plan or issuer reimburses the provider constitutes payment in full for the test, with no cost sharing to the individual
`or other balance due.
`23 See Exhibit E (Patient CS’ Level 1 Appeal and Letter in Support of Re-Adjudication of Covid Testing Claim).
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`Case 2:22-cv-00003 Document 1 Filed on 01/05/22 in TXSD Page 14 of 24
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`to provide 24 Hour Covid with all documents, records, and other information relevant to this claim,
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`including, but not limited to: the health plan's summary plan document(s) and other relevant plan
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`documents; the administrative services agreement (if applicable); the methodology used in
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`calculating the allowed amount for this claim; and any and all internal rules, policies, and
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`guidelines relied upon in the processing of this claim. The Cigna Defendants failed to both re-
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`adjudicate the claim and to provide the requested information/materials.
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`29.
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`On September 1, 2021, the Cigna TPA issued a letter to 24 Hour Covid upholding
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`its initial denial, stating its decision was based on the bundling of primary and secondary services.24
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`However, the Cigna TPA’s response did not comply with ERISA claim requirements as it pertains
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`to appeal responses as it does not address any points of concern or inquires made by 24 Hour Covid
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`on behalf of Patient CS regarding its failure to comply with the FFCRA and/or the CARES Act,
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`make no reference to any obligations to comply with the aforementioned laws, and, as mentioned
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`above, no requested information/materials were ever provided.
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`30.
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`Regardless, the Cigna TPA ’s response letter states that “[its] decision represents
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`the final step of the internal appeal process.” Therefore, 24 Hour Covid has exhausted the Cigna
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`TPA’s appeals process and is entitled to pursue any available remedies under Section 502(a) of
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`ERISA.25
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`III. THE FIDUCIARY DUTIES OF THE CIGNA TPA AND THE CIGNA
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`MEDICAL PLAN COMMITTEE
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`31.
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`Pursuant to 29 U.S.C. § 1104 (A)(1)(B), the Cigna Medical Plan Committee, as the
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`plan administrator to the Cigna Health Plan, and the Cigna TPA, as a third-party claims
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`administrator of the Cigna Medical Plan, both constitute as fiduciaries to members of the Cigna
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`24 See Exhibit F (Cigna Appeal Response dated September 1, 2021).
`25 Supra Footnote 24.
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`Medical Plan; therefore, they must discharge their duties solely in the interest of the members of
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`the Cigna Medical Plan (e.g. Patient CS). Also, pursuant to 29 U.S.C. § 1105(a), the Cigna Medical
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`Plan Committee is also liable for Cigna’s breach of its fiduciary duties.
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` 32.
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`The Cigna TPA and the Cigna Medical Plan Committee are administering the Cigna
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`Health Plan’s benefits in a manner that cause all Cigna Defendants to be in violation of the FFCRA,
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`the CARES Act, ERISA, and the terms of the Cigna Medical Plan’s plan terms. Moreover, the
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`Cigna TPA and the Cigna Medical Plan Committee are not administering the benefits of the Cigna
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`Medical Plan in the best interest of its members as their administration of the Cigna Medical Plan
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`have left members of the Cigna Medical Plan, like Patient CS, financially responsible for amounts
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`that should otherwise be covered by the Cigna Medical Plan. Furthermore, the Cigna Medical Plan
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`Committee is prohibited by ERISA from delegating all of its fiduciary duties to another entity such
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`as the Cigna TPA and has a fiduciary obligation to oversee the actions of its third-party claims
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`administrator.
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`33.
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`The Cigna Medical Plan Committee breached its fiduciary duties under ERISA by
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`allowing the Cigna TPA to improperly adjudicate Patient CS’ Covid Testing claim in violation of
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`the FFCRA and the CARES Act and causing him to be financially responsible for a balance-bill
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`that Cong