United States District Court, N.D. Illinois, Eastern Division
CONNECTICUT GENERAL LIFE INSURANCE CO. and CIGNA HEALTH & LIFE INSURANCE CO., Plaintiff,
SOUTHWEST SURGERY CENTER, LLC, d/b/a CENTER FOR MINIMALLY INVASIVE SURGERY Defendant.
MEMORANDUM OPINION AND ORDER
Robert Blakey United States District Judge
Connecticut General Life Insurance Company and Cigna Health
and Life Insurance Company (Cigna) sued Southwest Surgery
Center (CMIS) for insurance coverage costs that Cigna
allegedly overpaid CMIS. . CMIS brought counterclaims
alleging that Cigna wrongfully withheld payments for claims
properly filed by CMIS. . Cigna moved to dismiss
CMIS' third counterclaim, which alleges that Cigna
violated the Illinois Consumer Fraud and Deceptive Business
Practices Act (ICFA), 815 ILCS 505/1 et seq. .
For the reasons explained below, this Court grants
The Counterclaim's Allegations
Court incorporates by reference, and presumes familiarity
with, its prior opinion addressing CMIS' motion to
dismiss Cigna's complaint . This Court provides
additional facts relevant to CMIS' counterclaim but only
briefly revisits the relevant transactions, from which both
parties' claims arise.
alleges that Cigna makes representatives available to answer
health care providers' questions about whether
Cigna's insurance plans cover certain services. 
¶ 13. Providers like CMIS can call these representatives
and confirm the scope of coverage for particular patients.
See id. ¶¶ 14-16. The answers that
Cigna's agents provide during these phone calls are
“supposed to be true and accurate” and constitute
“Cigna's unambiguous promise to pay the provider
for the service.” Id. ¶¶ 15-16.
May 15, 2010, CMIS did not have a direct written contract
with Cigna, and so lacked access to proof of patient coverage
under Cigna's health insurance plans. Id. ¶
18. As a result, CMIS would call Cigna to verify the coverage
and eligibility for Cigna insureds seeking medical services
from CMIS. Id. ¶ 19. CMIS called Cigna
“before providing services to each insured, ” and
relied upon Cigna's “coverage and eligibility
verifications in deciding whether to deliver its services to
Cigna's insureds without requiring the patients to pay
CMIS's bill in full” at the time of the service.
Id. ¶¶ 19, 20. If CMIS required patients
to pay upfront and in full, that would “leave the
patients in the position of having to file claims for
reimbursement with Cigna if they wanted to get the benefit of
their health insurance.” Id. ¶ 20.
May 2011 and August 2014, CMIS provided “facility
services” to numerous patients insured by or through
Cigna; these services include the use of CMIS' operating
rooms, supplies, and nursing services. See id.
¶¶ 23-25; [125-1] at 2-4. Before providing facility
services to these insureds, CMIS called Cigna to verify their
eligibility and coverage and thus determine whether Cigna
would pay CMIS the costs of those services.  ¶ 26.
Cigna's agents represented that these insureds
“were covered and eligible for benefits for the
services” CMIS planned to provide. Id. ¶
28. Cigna's agents gave specific information about the
dollar limits and out-of-pocket expense maximums applicable
to the insureds, but never disclosed any other limitations on
coverage. See id. ¶¶ 29-30.
CMIS lacked access to the insureds' health plans and
policies, it relied upon Cigna's coverage verifications.
See id. ¶¶ 32-35. As a result, CMIS did
not require its patients to pay their bills in full at the
time CMIS provided a service. Id. ¶¶
36-37. Instead, CMIS billed Cigna after providing its
services to the insureds, submitting properly completed forms
for payment under the insureds' plans. Id.
¶¶ 38-39. Cigna never paid CMIS the amounts its
agents cited during the coverage and eligibility verification
phone calls, damaging CMIS in an amount exceeding $75, 000.
Id. ¶¶ 40, 43.
August 2012, Cigna flagged CMIS' account because of the
fee-forgiveness scheme alleged in Cigna's complaint,
see  ¶¶ 24-37, 46, and CMIS'
failure to produce certain requested information, 
¶ 53. As a result of that flag, Cigna's claim system
denied CMIS claims submitted from that point forward. See
id.; [125-1] at 6-8. From August 2012 through August
2014, Cigna denied numerous CMIS claims for various medical
services.  ¶ 53; [125-1] at 6-8. During that
period, however, Cigna agents continued to verify coverage
and eligibility for their insureds when CMIS agents called
about specific patients. See  ¶¶
47-54. Thus, Cigna agents confirmed that Cigna would pay
CMIS' costs in these verification calls while the account
flag-blocking payment of CMIS' claims-remained in place.
See id. ¶¶ 53-54. CMIS alleges that the
misrepresentations made during these verification calls were
knowing and intentional. Id. ¶¶ 55-56. Had
CMIS known Cigna would not pay for the services CMIS provided
to these insureds, CMIS “would have taken upfront
payments” from those patients “or sent them to
another facility.” Id. ¶ 58. Cigna has
not paid the amounts that its agents indicated it would pay
CMIS for the services provided to these insureds, damaging
CMIS in excess of $75, 000. Id. ¶ 62.
respect to these insureds-whose claims CMIS filed between
August 2012 and August 2014-CMIS alleges that Cigna
misrepresented their eligibility and coverage “in the
course of its business of supplying patients and providers
with information about the patients' health care
coverage. Id. ¶ 66. CMIS also claims that
Cigna's misrepresentations “harmed the patient
consumers and CMIS because it deceived them into believing
Cigna would pay for the services to be performed at CMIS
when, in fact, it would not.” Id. ¶ 67.
filed its amended counterclaim in January 2018, alleging
claims for promissory estoppel (Count I), fraud (Count II),
and violations of the ICFA (Count III). Id. at 4, 8,
10. This opinion only addresses Cigna's motion to dismiss
Count III of CMIS' counterclaim. .
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) “challenges the sufficiency of the complaint
for failure to state a claim upon which relief may be
granted.” Gen. Elec. Capital Corp. v. Lease
Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). A
counterclaim must meet the same standard as a complaint to
survive a motion to dismiss. Cozzi Iron & Metal, Inc.
v. U.S. Office Equip., Inc., 250 F.3d 570, 574 (7th Cir.
2001). Thus, it must provide a “short and plain
statement of the claim showing that the pleader is entitled
to relief, ” Fed.R.Civ.P. 8(a)(2), giving the
counter-defendant “fair notice” of the claim and
its basis, Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (quoting Conley v. Gibson, 355 U.S. 41,
47 (1957)). The counterclaim must state a facially plausible
claim to relief: the alleged facts must permit “the
reasonable inference” that the counter-defendant is
liable for the misconduct alleged. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
evaluating a counterclaim, this Court draws all reasonable
inferences in the counter-plaintiff's favor and accepts
all well-pleaded allegations as true. See id. This
Court need not, however, accept legal conclusions or
conclusory allegations. McCauley v. City of Chicago,
671 F.3d 611, 616 (7th Cir. 2011). Thus, “threadbare
recitals of the elements of a cause of action, supported by