Ten addiction treatment organizations in California are suing Cigna, seeking $12.7 million in alleged underpayments for substance use disorder care. The lawsuit, filed on August 19, 2026, in the U.S. District Court for the Central District of California, claims the insurer paid only $2.5 million of the $15.2 million billed for 83 patients treated between March 2022 and March 2026.
The plaintiffs include TML Recovery LLC, Encinitas Detox, Cardiff Health Services, Carlsbad Mental Health Services, Harbor Health, IMS Services, La Costa Recovery, San Diego Mental Health, Southern California Recovery Centers Oceanside, and Sunray Services. The defendants encompass the entire Cigna enterprise, including Cigna Health and Life, Evernorth Behavioral Health, Connecticut General Life, and Cigna Health Management.
Court documents cite internal emails and memos from a prior case as evidence that Cigna leadership maintained a list of out-of-network facilities for its special investigations unit to track. The complaint alleges the company halted or froze payments after verifying coverage and authorizing medically necessary treatment.
One 2015 email between Cigna employees suggested the insurer was reimbursing at billed charges because Medicare rates for substance abuse did not exist.
Rich Collins, a partner at Arnall Golden Gregory LLP representing the providers, stated that insurance corporations underpaying for these services results in fewer treatment options and reduced access to care. He argued that unreasonable reimbursement rates impose financial barriers on patients and violate the Mental Health Parity and Addiction Equity Act by failing to ensure parity between physical and mental health coverage.
The new complaint overlaps with a previous case involving the same parties, which closed in November 2024, but extends allegations beyond that timeline. The lawsuit alleges that audits often concluded with providers giving up, closing down, or missing appeal deadlines. Cigna reportedly engaged in repricing claims for addiction treatment far below standard values.
