This week’s notable decision is North Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare, No. 18-20576, __ F.3d __, 2020 WL 1291590 (5th Cir. Mar. 19, 2020), where the Fifth Circuit, in the case’s second trip to the Court of Appeals, ruled in favor of Cigna in its dispute with an out-of-network healthcare provider.

This is an action by a hospital against Cigna for the alleged underpayment of more than $40 million in benefit claims assigned to the hospital by Cigna insureds. The dispute revolved around North Cypress’ billing approach. In order to encourage prompt payment by its patients, the hospital offered to reduce the patients’ coinsurance obligations—even if their treatment was out-of-network—if they paid a certain amount of their bill within 120 days. Under this approach, out-of-network patients received a significant discount, North Cypress incurred lower collection costs, and meanwhile Cigna’s payment obligation remained the same. Continue Reading Fifth Circuit Rules in Favor of Cigna in Dispute with Out-of-Network Provider Over Patients’ Coinsurance Obligations

Good morning, ERISA Watchers!  This has been an extraordinary week to say the least.  I’m currently writing this from under a “shelter-in-place” order in San Francisco.  While there is a lot going on in the world, there wasn’t a lot of excitement in the courts when it came to ERISA decisions this past week.  So, I chose to highlight two plaintiff-friendly decisions from district courts, one decided under de novo review and the other under the arbitrary and capricious standard.

The first case is Szabo v. Hartford Life and Accident Ins. Co., No. 18-CV-06258 (N.D. Ill. March 10, 2020). Plaintiff Szabo became disabled after he collapsed at work from syncope, orthostatic hypertension, and vertigo.  He applied for long-term disability (“LTD”) benefits from Hartford, and Hartford approved and paid his claim for two years before terminating them.  After an unsuccessful appeal, Szabo filed suit.  In the lawsuit, the main disputes were factual. The parties agreed Plaintiff suffered from syncope. They disagreed on (1) the frequency and severity of Plaintiff’s symptoms; (2) whether and to what extent Plaintiff needed to lie down to mitigate his symptoms; and (3) whether Plaintiff’s symptoms prevented him from working a sedentary job.  Continue Reading District Courts Rule Against Hartford and Aetna in Long-Term Disability Disputes

This week’s notable decision is a district court order in Auwae v. Metro. Life Ins. Co., No. 19-CV-02504-RBJ, 2020 WL 996874 (D. Colo. Mar. 2, 2020), a matter challenging the applicability of an ERISA life insurance policy’s two-year suicide exclusion. 

On a motion to dismiss, the court was asked to decide if the following exclusion in a group life policy applied as written: 

“If a Dependent commits suicide within 2 years from the date Life Insurance for such Dependent takes effect, We will not pay such insurance….” 

While the date of enrollment was disputed, it was not after January 1, 2018. The dependent committed suicide on February 4, 2019—more than one year, but less than two years after the latest effective date. MetLife denied the claim applying the language as written. Plaintiff appealed, noting that MetLife violated Colorado law by not recognizing the applicability of Colorado Revised Statute § 10-7-109. MetLife upheld the denial of benefits.  Continue Reading District Court Rules Colorado Law Turns Life Insurance Policy’s Two-Year Suicide Exclusion into a One-Year Exclusion