NEW YORK, May 17, 2006 (PRIMEZONE) -- The Judicial Panel on Multidistrict Litigation ("JPML") has issued a decision that will allow a pending case against CIGNA to proceed before the Honorable Faith S. Hochberg of the United States District Court for the District of New Jersey, where it was filed, rather than before the Southern District of Florida, where a current multidistrict litigation ("MDL") has been proceeding against a number of managed care companies.
The lawsuit was filed by Pomerantz Haudek Block Grossman & Gross LLP (the "Pomerantz firm") on behalf of CIGNA subscribers, alleging that CIGNA has violated its obligations under the Employee Retirement Income Security Act ("ERISA") by improperly reducing payments for services received from providers who are out-of-network ("ONET"), or who do not participate in CIGNA's network of providers, based, among other things, on a flawed method for determining whether ONET charges were "reasonable and customary" (sometimes referred to as "usual, customary and reasonable" or "UCR").
According to the complaint, one of the named plaintiffs had suffered nearly complete facial paralysis during birth, and, as an adult, was able to locate a specialist doctor with the expertise to perform the necessary surgery to restore proper functioning to her facial muscles and to repair nerve damage. The doctor, who was one of the few physicians in the world with the training and experience necessary to perform the complicated microsurgery, obtained preauthorization for the procedure and successfully performed it with the aid of an assistant surgeon. CIGNA, however, paid less than half of the billed charges, claiming, among other things, that the bills were in excess of "prevailing charges" for the relevant services, or, in other words, were not "reasonable and customary." The plaintiff was therefore left financially responsible for the unpaid portion of the medically necessary services.
Plaintiffs allege that CIGNA uses inappropriate policies to reduce reimbursements for ONET services, including relying on an invalid database for making coverage determinations. They seek full reimbursement based on the billed charges. They also seek to represent a class of all CIGNA subscribers who have received reduced benefits due to CIGNA's ONET reimbursement policies. The Pomerantz firm filed the action as a related case to two pending litigations it had previously filed against Health Net, Inc. and certain of its health care subsidiaries, alleging similar ERISA violations. Judge Hochberg certified a national class of Health Net subscribers in August 2004, which holding is currently on appeal to the Third Circuit Court of Appeals.
After the case was filed in New Jersey, CIGNA moved to transfer it to Florida, claiming that it was related to cases pending there. However, the Honorable Federico A. Moreno, who is overseeing those cases, found that the CIGNA UCR litigation was unrelated to the matters before him, holding that "there is virtually no overlap between the causes of action in the MDL cases and the causes of action" in the CIGNA UCR case, and entered a suggestion of remand. The JPML ordered the case be remanded to Judge Hochberg.
As a result of the finding of the JPML, the plaintiffs will proceed to litigate their claims against CIGNA on behalf of its subscribers. If you have any questions concerning the pending litigation against CIGNA, or wish to review a copy of the Complaint, please contact D. Brian Hufford (dbhufford@pomlaw.com) of the Pomerantz firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
Pomerantz Haudek Block Grossman & Gross LLP, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, antitrust and ERISA class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, corporate misconduct and ERISA violations. The Firm has recovered numerous multi-million dollar damages awards on behalf of class members. For more information about the Pomerantz Firm, visit its web site at www.pomlaw.com.