Ten substance use disorder treatment centers in California have filed a federal lawsuit against Cigna Corporation and several affiliated entities, alleging the insurer paid only about 16 percent of their covered charges for services rendered to 83 patients. The complaint, lodged on August 19, 2026, in the US District Court for the Central District of California, seeks approximately $12.8 million in unpaid funds.
The plaintiffs, who operate as out-of-network clinical laboratories and treatment facilities, assert that Cigna received a fee on the difference between what was owed and what was paid. The filing details that aggregate covered charges totaled roughly $15.3 million for treatments provided from March 2022 through March 2026. However, the group received only $2.5 million in payments.
Individual provider payouts varied widely, ranging from zero to just over 28 percent of their billed amounts.
The core of the dispute involves Cigna’s reimbursement methodology, specifically its "Maximum Reimbursable Charge" or MRC framework. The complaint outlines two primary calculation methods under this system. The first compares a provider’s normal charge against a percentile of regional charges compiled in a Cigna database.
The second, described as a "Medicare-like" rate, compares the normal charge to a percentage of a schedule derived from Medicare methodologies.
According to the filing, the second method was effectively unusable for these providers because Medicare established no specific rates for substance use disorder services during the relevant period. The complaint cites Cigna’s own myCigna Legal Disclaimer, which states that when no comparable Medicare rate exists, reimbursement should be based on either the provider’s normal charge or an "80th percentile" of billed charges.
Instead of following that guidance, the lawsuit alleges Cigna utilized a code cross-walk process. Detox and residential treatment codes were allegedly matched to those for inpatient psychiatric hospitals. Similarly, partial hospitalization and outpatient care codes were linked to skilled nursing facilities and general behavioral health counselors. The filing argues these matches resulted in payments far below reasonable and customary rates.
