Cigna hit with second class-action lawsuit alleging cost-shifting scheme with claims administrator

Cigna has been served with a second class-action complaint alleging the insurer conspired with a claims administrator to divert costs to consumers disguised as fees for medical care.

The lawsuit, filed this week in the U.S. District Court in the Southern District of California, mirrors a complaint filed in Pennsylvania in April alleging Cigna colluded with American Specialty Health (ASH) to misappropriate millions of dollars each year and falsified Explanation of Benefits (EOB) forms to disguise charges from ASH.

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Cigna contracts with ASH to build a network of providers and administer claims. In the California lawsuit, a Cigna beneficiary alleges the insurer diverts administrative costs to members rather than using plan fees and subscriber premiums.

Similar to the Pennsylvania case, the plaintiffs, Jianliang Zhu and Joyce Allen, cite several occasions where they were billed sometimes twice as much as their providers received.

“Under the false pretense that ASH’s charges are medical expenses, Cigna and ASH secretly assess these charges to members and plans as part of members’ and plans’ financial responsibility for health care claims,” the complaint (PDF) states.

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A Cigna spokesperson said the company cannot comment on pending litigation.

Cigna, which is in the process of closing a $67 billion deal with Express Scripts, has been hit with a rash of lawsuits over the last several months that allege the insurer overcharged members.

In March, a Connecticut judge allowed the bulk of a lawsuit to proceed against Cigna alleging the company charged members more than 10 times the price it paid the pharmacy for certain medications.

Meanwhile, the insurer has reported strong earnings tied to its commercial business lines with overall net income up 55% in the first quarter of 2018 compared to the previous year.