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Cigna Owes Millions in Covid Testing Costs, Doctor Group Claims (1)

Nov. 6, 2020, 7:53 PM; Updated: Nov. 6, 2020, 9:30 PM

Cigna Health & Life Insurance Co. wrongly refused to reimburse more than $4.6 million in Covid-19 testing costs on behalf of more than 4,400 patients, a Connecticut medical practice alleged Friday in a federal lawsuit.

Murphy Medical Associates LLC, which says it has tested more than 28,000 people for Covid-19 at a dozen drive-thru and walk-up testing sites in Connecticut and New York, accuses Cigna of failing to pay more than $4.6 million in valid medical claims tied to the tests.

Cigna instead engaged Murphy in a “paperwork war of attrition” by making “voluminous medical records and audit requests in a clear effort to overwhelm the Murphy Practice and to delay its payment obligations indefinitely,” the medical practice said in a complaint filed in the U.S. District Court for the District of Connecticut.

The lawsuit is an early instance of the Employee Retirement Income Security Act being used in coronavirus coverage litigation, but it also brings claims under major Covid-19 relief laws and state law.

Health insurers must cover Covid-19 testing without cost sharing under the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act, both enacted in March.

That coverage applies when the tests are deemed “medically necessary” by the “attending health care provider,” according to the Centers for Medicare & Medicaid Services, which has created some tension between insurers and doctors offices about whether certain tests apply.

Broad testing is needed to slow the spread of Covid-19, scientists say. The U.S. continues to see record levels of cases, and health officials worry the new case count will rise even more as winter approaches and outdoor gatherings become less feasible.

Doctors at the Murphy practice tested for Covid-19 along with other respiratory viruses using a BioFire test. They also gave patients a “basic examination” and did blood tests, which Murphy doctors considered a “comprehensive approach” based on peer-reviewed studies “and other authoritative information,” the complaint said.

Cigna is also accused of falsely telling patients that Murphy is running a fraudulent enterprise. These “defamatory and malicious” statements have induced some cities and facilities to end their relationships with the practice, Murphy claims.

Causes of Action: Violations of the CARES Act; ERISA; and Connecticut insurance and tort law.

Relief: Damages of no less than $4,680,326, interest, declaratory and injunctive relief, and attorneys’ fees.

Response: Cigna didn’t immediately respond to a request for comment.

Attorneys: Garfunkel Wild PC represents Murphy Medical.

The case is Murphy Med. Assocs., LLC v. Cigna Health & Life Ins. Co., D. Conn., No. 3:20-cv-01675, complaint 11/6/20.

(Updated to include additional context beginning in the fifth paragraph.)

To contact the reporters on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com; Jacquie Lee in Washington at jlee1@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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