Cigna to Face ERISA Lawsuit by Provider’s Bankruptcy Successor

Cigna Health & Life Insurance Co. must face a lawsuit by the bankruptcy successor of a defunct mental health treatment center after the Ninth Circuit ruled Friday that the successor was authorized by ERISA to sue for unpaid claims.

Extending standing to Bristol SL Holdings Inc. “would align with the ‘general goal’” of the Employee Retirement Income Security Act, while denying the company standing would create “serious perverse incentives” and allow insurers to force health-care providers into bankruptcy, the U.S. Court of Appeals for the Ninth Circuit said. The court aligned itself with decisions of the Fourth, Fifth, ...