New Jersey CarePoint Hospitals Sue Cigna for ERISA Violations

On Monday, Hudson Hospital OPCO, LLC, IJKG PROPCO LLC, and HUMC OPCO, LLC, all formerly known as the CarePoint Hospitals, filed a complaint in the District of New Jersey against Cigna Health and Life Insurance Company and Connecticut General Life Insurance Company for allegedly “drastically” underpaying and refusing to pay the hospitals as required by their insurance policies.

Between March 15, 2016 and May 31, 2021, the hospitals provided services to 10,650 patients, but they claim that for 8,083 of those visits, “Cigna either did not pay or underpaid for hospital services provided by the CarePoint Hospitals” as required by the Employee Retirement Income Security Act (ERISA).

The hospitals purportedly billed $244,344,882 to these patients, of which Cigna is responsible for $211,512,899. The plaintiffs claimed that to this day, Cigna has only paid back $76,155,427 of this total. Even though these patients were out-of-network, the plaintiffs treated them as it is required by the Emergency Medical Treatment & Labor Act (EMTALA), regardless of whether or not they can pay for their treatment. Thus, the plaintiffs “depend on commercial insurance companies to meet their legal responsibility and timely and properly pay a reasonable rate to providers.”      

Under the Affordable Care Act (ACA) and the Families First Coronavirus Response Act (FFCRA), healthcare providers like Cigna must cover out-of-network fees and all fees for COVID-19 testing. New Jersey’s healthcare laws also require insurance carriers to “pay claims within 30 days after the insurance carrier receives the claim when submitted electronically, or 40 days if received non-electronically.” Thus, the CarePoint Hospitals are suing for three violations of ERISA, breach of contract, breach of the duty of good faith and fair dealing, quantum meruit, a violation of New Jersey’s Health Claims Authorization, Processing and Payment Act (HCAPPA), and promissory estoppel.

The plaintiffs are seeking unpaid benefits, a declaration that Cigna violated their fiduciary duties under ERISA and that they must conduct a “full and fair review,” contractual damages, general damages, restitution, pre- and post-judgment interest, attorney’s fees and costs, and other relief.

The CarePoint Hospitals are represented by K&L Gates, LLP.