Opinion ID: 2785100
Heading Depth: 2
Heading Rank: 1

Heading: Cigna’s plans

Text: The more than 8,000 insurance plans governing the claims in this case sort into classes along several different lines. Most are funded by employers, with Cigna acting only as an administrator—“Administrative Services Only” or “ASO” plans. 1 Some are funded by Cigna itself—“fully insured” plans. Some limit out-of-network benefits to a set percentage of a charge based on Medicare pricing—“MRC2” plans—while other plans limit reimbursement to a percentage of rates charged by other providers in the geographic area— “MRC1” plans. Patients generally assigned their rights under their insurance plans to North Cypress, though Cigna disputes the existence and adequacy of many assignments. In general, across the different plans members can seek care from an innetwork or out-of-network provider. In-network providers contracted with Cigna to provide services at agreed prices. Out-of-network providers did not. 1 Although Cigna only administered many of the plans, we will sometimes speak in terms of what Cigna “owes” for simplicity. 2 Case: 12-20695 Document: 00512963599 Page: 3 Date Filed: 03/10/2015 No. 12-20695 Members are responsible for certain deductibles, copayments, or coinsurance amounts, which are larger if the provider is not in the network. Cigna maintains that these cost-sharing mechanisms ensure that innetwork providers are less costly to patients than out-of-network providers. For example, in some of the plans at issue, once the member satisfies the deductible, the member’s coinsurance level at in-network providers is 80%; the plan paying 80% and the member 20%. With an out-of-network provider, the member faces both a higher deductible and a greater coinsurance burden; the plan paying 60% and the member 40% of remaining costs. Cigna argues that these cost-sharing mechanisms are essential to lower medical and health insurance costs; that incentivizing members to choose innetwork providers—who charge both the members and the plans less—reduces overall plan costs, an incentive lost when an out-of-network provider does not require patients to pay all of the coinsurance or other obligations contemplated by the plans. Relatedly, some or all of the plans at issue 2 contain the following or similar provisions: • “[P]ayment for the following is specifically excluded from this plan: . . . charges which you are not obligated to pay or for which you are not billed or for which you would not have been billed except that they were covered under this plan.” 3 • “[Y]ou and your Dependents may be required to pay a portion of the Covered Expenses for services and supplies. That portion is the Copayment, Deductible or Coinsurance.” • “Coinsurance means the percentage of charges for Covered Expenses that an insured person is required to pay under the plan.” 2 There are thousands of plans involved in this case, but only a few appear in the record. Both parties make broad generalizations about plan language. 3 At least one of the plans, however, states that this exclusion does not apply if the “expenses are considered Medically Necessary.” 3 Case: 12-20695 Document: 00512963599 Page: 4 Date Filed: 03/10/2015 No. 12-20695 • “The provider may bill you for the difference between the provider’s normal charge and the Maximum Reimbursable Charge, in addition to applicable deductibles, copayments and coinsurance.”