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Advanced Ambulatory Surigal Center, Inc. v. Connecticut General Life Insurance Co.

United States District Court, N.D. Illinois, Eastern Division

June 13, 2017

ADVANCED AMBULATORY SURIGAL CENTER, INC., an Illinois Corporation, Plaintiff,
v.
CONNECTICUT GENERAL LIFE INSURANCE CO., a Delaware Corporation, Defendant.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, United States District Court Judge

         Before the Court is Defendant's Motion for Partial Summary Judgment [ECF No. 89]. For the reasons stated below, the Court grants Defendant's Motion.

         I. BACKGROUND

         A. Factual Background

         The following facts are undisputed unless noted otherwise. Plaintiff Advanced Ambulatory Surgical Center, Inc. (“AASC”) is a state-licensed outpatient surgery center located in Chicago, Illinois. (ECF No. 101 (“Pl.'s SAUF”) ¶ 1 & Ex. 1 ¶ 3.) When a surgeon wants to perform a procedure at AASC, she submits paperwork, including a photocopy of the patient's health insurance card. (ECF No. 90 (“Def.'s SUF”) ¶¶ 30-31.) Before it renders any services, AASC seeks to verify the patient's insurance coverage with respect to the planned procedure by calling the company who issued the patient's insurance policy or, as the case may be, administers the policy's benefits. (Pl.'s SAUF ¶ 2.) Indeed, AASC rarely treats patients who lack insurance. (Campos Tr. 14:5-15; Rubio Tr. 21:13-23.) During these calls, AASC employees obtain the patient's basic benefits information and record it on a one-page insurance verification form. (Def.'s SUF ¶ 31; Pl.'s SAUF ¶ 3; see, Id. at Ex. 1.) AASC treats patients insured under health benefit plans administered by Defendant Connecticut General Life Insurance Company, Inc. (“Cigna”), although it is an out-of-network provider with respect to Cigna plans. (Def.'s SUF ¶ 1.)

         Cigna provides claims administration and insurance services for health benefit plans that employers offer. Under Cigna plans, covered individuals have the option to receive medical care from in-network providers, who have contracted with Cigna to accept a negotiated schedule of fees for medical services, and out-of-network providers, who formulate their own menu of services and fees. (Def.'s SUF ¶¶ 5-6.) To be eligible for benefits, a Cigna plan member typically must pay a portion of the covered health care expenses either in the form of coinsurance (a fixed percentage of the covered charges), a copay (a flat per-service fee), or a deductible (the total dollar amount of covered expenses that the member must pay during the calendar year before the plan's benefits kick in). (Id. ¶¶ 7, 9.)

         To nudge policyholders toward in-network providers, most insurance companies impose higher patient contribution requirements (known as “cost shares”) with respect to services rendered by out-of-network providers. Seeking a competitive advantage, some out-of-network providers disregard these required patient contributions and instead engage in “fee forgiveness” - billing patients nothing and simply accepting reimbursement under a plan as payment in full. (Def.'s SUF ¶ 10.) This practice actually reverses the intended incentives, as patients who receive treatment from out-of-network fee forgivers actually pay less out-of-pocket than they otherwise would for the same in-network health care services. To discourage fee forgiveness, many benefit plans, such as those administered by Cigna, refuse to cover “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.” (Id. ¶ 11.) In addition, Cigna tries to parry the lunge of fee forgiveness by limiting coverage to “covered expenses, ” defined as expenses actually incurred by the patient after he or she becomes insured under a given plan. (Id. ¶ 12.)

         Since 2005, Cigna has precipitated all benefits verification calls with a disclaimer. Until February 2013, Cigna's disclaimer went:

The following information does not guarantee coverage or payment. The governing document for a patient's coverage is their Summary Plan Description. Payment for services will be based on medical necessity, plan provisions, and eligibility at the time of service.

(Def.'s SUF ¶ 25.) Cigna slightly altered the wording of the disclaimer in February 2013, and since then it has announced:

By continuing with this call, you understand, accept, and agree that the following covered services information does not guarantee coverage or payment and is subject to all benefit plan provisions. Please refer to the Summary Plan Description for coverage. Payment for services will be based on medical necessity, plan provisions, including limitations and exclusions, and eligibility at the time of service.

(Id. ¶ 26.) Both disclaimers ran before the inquiring provider could access Cigna's automated benefits system or speak to a live support representative. (Id. ¶ 27.)

         During the time period at issue, two AASC employees called Cigna to verify patient benefits prior to a scheduled procedure: Yuri Campos (“Campos”) and Kathy Rubio (“Rubio”). Campos acknowledged that, whenever she called Cigna, she heard a disclaimer warning that payment on any particular claim was not guaranteed; Rubio could not recall the content of the disclaimer at her deposition but did not deny hearing it whenever she called Cigna. (Id. ¶ 38.) Both remained on the line long enough to speak with a live Cigna agent who could verify the patient's insurance information. Joanna Brzostowska (“Brzostowska”), who oversees the company's billing and collection processes, did not supervise Campos or Rubio while they were making these calls and thus never heard what Cigna's agents said in response to their questions. (Pl.'s SAUF at Ex. 1 ¶¶ 1-2; Brzostowska Tr. 26:22-27:9.)

         After identifying various personal information of the patient, Campos or Rubio recorded what the Cigna agent told them about the patient's out-of-network plan benefits on the patient's insurance verification form, including the patient's deductible, amount of deductible met, “Coverage (%), ” maximum out-of-pocket amount, amount of the maximum met, and annual maximum for outpatient surgery (if applicable). (Def.'s SUF ¶ 31; Pl.'s SUF at Ex. 1.) In addition, they would sometimes indicate on the form whether the insurer's reimbursement was based on “Usual & Customary” rates or Medicare rates and whether the plan was employer-sponsored. (Ibid.) Finally, they would fill in a portion of the form indicating exclusions or restrictions on the policy, either for surgical procedures or specific body parts or specialties. (Ibid.)

         On these calls, Cigna's representatives made no promises or guarantees of payment, and neither Campos nor Rubio were led to believe that AASC was certain to receive any specific reimbursement for the surgical services it would ultimately render. (Def.'s SUF ¶¶ 32-33; see also, Brzostowska Tr. 265:7-18 (denying “aware[ness] of any insurance verification call in which a Cigna customer service representative promised or agreed to pay all or part of the billed charges”).) Neither provided Cigna with estimates or exact amounts of billed charges, because when they placed these calls AASC did not know what its billed charges would be. (Ibid.) Neither Campos nor Rubio asked Cigna for reimbursement estimates, because Cigna would not release that information. (Id. ¶ 34.) Campos and Rubio testified to their general understanding that the benefits information Cigna verified, such as the percentage they recorded on the verification forms in the “Coverage (%)” field, conveyed to them that the patients' procedures would be covered at those levels. (Id. ΒΆ 39.) Campos believed that this percentage referred to the allowed amount; Rubio understood it to apply either to the usual and customary amount determined by the insurance company or a Medicare-based amount; and Brzostowska generally ...


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