Federal Court Holds That Pathology Group States Viable Claims Against Multiplan and Cigna for Failing to Ensure In-Network Payment

ACLA is a pathology group that participates in MultiPlan’s health care provider network and that provided clinical laboratory oversight services to Cigna’s members. Cigna is a payer in the MultiPlan network pursuant to an agreement between Cigna and MultiPlan.

In the suit, ACLA alleges that Cigna initially reimbursed ACLA for services provided to Cigna members participating in the MultiPlan network at the negotiated rate specified in the MPI Participating Professional Group Agreement between ACLA and MultiPlan. Then, ACLA claims, Cigna adopted a policy change and started paying for the same services at less than the negotiated rate. ACLA argues that MultiPlan breached its contractual obligations to ACLA by acquiescing to the change, and that ACLA can recover from Cigna as a third-party beneficiary of the client agreement between Cigna and MultiPlan. ACLA seeks to recover the difference between the amount that it would have received under the negotiated rate and the lower amounts that it received after the policy change. Cigna and Multiplan moved to dismiss, arguing they had no such obligations to ACLA.

First, the court ruled that ACLA sufficiently stated a claim for breach of contract against MultiPlan. Specifically, the court held that the MPI agreement did not unambiguously support Multiplan’s reading that the MPI agreement allowed Cigna to unilaterally opt out of the MultiPlan network. The court found that the contract language and course of dealing between the parties reasonably supported ACLA’s interpretation that the duty to pay the MultiPlan network rate is triggered when ACLA provides services to Cigna patients through the MultiPlan network. The court further held that any ambiguity as to whether MultiPlan had a duty to require Cigna to pay ACLA at the negotiated rate should be construed against MultiPlan, which drafted the MPI agreement.

The court also ruled that ACLA sufficiently stated a claim for breach of contract as a third-party beneficiary of the client agreement between Cigna and MultiPlan. That agreement, the court found, instructs that Cigna must reimburse providers for covered services at the rates negotiated in the MPI agreement. The court found that the client agreement could be construed to confer third-party beneficiary rights to ACLA given that instruction and the parties’ course of dealing, even though the client agreement expressly disclaimed any third-party beneficiary rights.

The court also held that the Employee Retirement Income Security Act of 1974 (ERISA) did not preempt ACLA’s claims against Cigna. As many other courts have held in similar disputes, this court explained that the claims arose from and turned on the MPI and client agreements, not the terms of the underlying ERISA plans.

The court also ruled that ACLA sufficiently stated a claim for unjust enrichment against Cigna under Tennessee law. For that claim, ACLA alleges that Cigna received a benefit from ACLA’s services without paying for them, and that ACLA was prohibited from seeking payment directly from Cigna’s enrollees under the MPI agreement.

This decision is an encouraging result for providers seeking to enforce payment obligations under the MultiPlan network. This case, like many others, instructs providers to scrutinize contract language when negotiating their agreements with health care networks, particularly the extent to which it obligates the network to prevent payers’ attempts to evade the network rate. That language could make the difference in affording the provider a remedy against payers that fail to comply with obligations under the network.