Cigna is facing a federal lawsuit alleging it underpaid ten California-based substance use disorder treatment centers by approximately $13 million. The complaint, filed last week in the U.S. District Court for the Central District of California, covers care provided to 83 patients from March 2022 through March 2026.
According to the filing, the plaintiffs claim Cigna paid each provider between zero and 28.29 percent of their covered charges. Collectively, the centers received $2,519,077 against total covered charges of $15,338,175. The lawsuit states that Cigna owes a remaining balance of $12,819,098.
The core dispute involves whether Cigna correctly applied its reimbursement methods for these services, particularly because Medicare rates are not available for them. The complaint questions if cost-containment fees and third-party repricing arrangements reduced payments below fair market value.
Each plan utilized one of two reimbursement methods known as Maximum Reimbursable Charge, or MRC. Under MRC 1, Cigna was required to pay the provider's normal charge for a similar service or a percentile of charges by other providers in the area, whichever was lower.
Under MRC 2, payment was based on the provider's normal charge or a percentage of a schedule developed using a methodology similar to Medicare for comparable services, whichever was lower.
Plaintiffs argue that MRC 2 was not a viable option because Medicare rates do not exist for their specific services. Instead, they allege Cigna matched detox and residential treatment codes to those used by inpatient psychiatric hospitals. They further claim partial hospitalization, intensive outpatient, and outpatient care were matched to codes for skilled nursing facilities and general behavioral health counselors.
