HOUSTON – A federal judge in Texas has dismissed an $8 million fraudulent billing case after three health care centers and two insurance companies agreed to a settlement.
In a May 24 order filed in the Houston Division of the Southern District of Texas, Judge Keith P. Ellison dismissed the claims brought by Connecticut General Life Insurance Co. and Cigna Health and Life Insurance Co.
The plaintiffs alleged that the Elite Center for Minimally Invasive Surgery LLC, Houston Metro Ortho and Spine Surgery LLC and Elite Ambulatory Surgery Centers LLC violated the Employee Retirement Income Security Act (ERISA).
According to the March 2016 complaint, the defendants are accused of waiving all or parts of the payments out-of-network patients are obligated to pay and “submitting false benefit claims to Cigna for charges that greatly exceed the estimated costs disclosed" to patients.
“Defendants effectuate their fee-forgiving routine through use of a sham ‘financial need’ or ‘hardship’ policy and/or by promising Cigna members that they will not be required to pay any more than what they would pay at an in-network facility,” the complaint said.
The complaint notes that a patient’s financial obligation for obtaining services at an out-of-network facility “is often greater in the form of higher co-payments, deductibles, co-insurance and the balance bill responsibilities.”
The plaintiffs claimed they were entitled to about $8 million in alleged overpayments from the defendants, who filed a motion for partial summary judgment April 23.
“By paying claims that were in fact excluded from coverage, Cigna has overpaid defendants on behalf of the plans,” the complaint said.
The complaint also alleges the defendants induced physicians to refer patients to Elite and Houston Metro Ortho “through lucrative investment opportunities.”
The plaintiffs were represented by attorneys John B. Shely, Laura Trenaman and Brian C. Pidcock of Andrews Kurth LLP in Houston.