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A New Side to COVID-19 Litigation (NJ)
July 9, 2021
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<p style="text-align: justify;">Last week, in <em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/07/Open-MRI-v.-Cigna-Health-and-Life-Insurance.pdf">Open MRI v. Cigna Health and Life Insurance</a>,</em> a New Jersey judge dismissed a suit alleging Cigna was unjustly enriched as a result of its refusal to pay for a health care provider’s costs of administering COVID-19 tests.</p>
<p style="text-align: justify;">Open MRI is a medical practice with locations throughout New Jersey. During the pandemic, Open MRI administered COVID-19 tests, diagnosed COVID-19 when necessary, and provided other basic COVID-19 treatment to its patients, resulting in nearly $400,000 in costs. Open MRI submitted these invoices to Cigna for repayment, and, after being denied, took Cigna to court.
Open MRI’s complaint has popped up in multiple forms, first alleging Cigna violated the insurance coverage provisions of the Families First Coronavirus Response Act and the Coronavirus Aid Relief and Economic Security Act, then morphing into allegations of unjust enrichment and Employee Retirement Income Security Act (ERISA). The suit bounced around the District of New Jersey for the past 10 months, with Cigna filing multiple motions to dismiss until the court held last week that the case was dismissed, without prejudice to amend.</p>
<p style="text-align: justify;">The court had good reason to leave the door open for amendment. The most recent allegations do not outright state, but rather strongly hint, that Open MRI had obtained assignments of its patients claims. To rightfully assert a claim under ERISA, only a “participant or beneficiary” may properly bring a claim. Without the explicit assignment of such a claim, Open MRI would have no standing to pursue these allegations and would not be entitled to any recovery.</p>
<p style="text-align: justify;">The next step in this already heavily litigated claim will be for Open MRI to clearly show it obtained assignments of its patients’ rights, or else Cigna will rightfully be denying any compensation for the claim. This case shows an interesting and as-yet unexplored side to the fraught world of COVID-19 insurance cases and the ripple effects insurers and insureds alike will likely be feeling for many years – and claims – to come.</p>
<p style="text-align: justify;">Thanks to Abby Wilson for her contribution to this post. If you have any questions or comments, please contact <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a>.</p>