Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our New Jersey newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (April 7, 2021, 8:01 PM EDT ) A radiology lab has urged a New Jersey federal judge not to grant Cigna's bid to ax its suit alleging the carrier wrongfully refused to pay for its COVID-19 services, arguing it had every right to bring a legal action to compel Cigna to provide benefits.
On Tuesday, Open MRI and Imaging of RP Vestibular Diagnostics said Cigna Health and Life Insurance Co. improperly characterized the nature of its suit and misrepresented two federal statutes that Congress enacted to assist treatment and diagnosis of COVID-19.
The lab, which is located in Rochelle Park, New Jersey, filed its initial suit in August and an amended complaint in December, alleging the insurer owed $400,000 for treatment and diagnostic services the lab provided to COVID-19 patients. The lab also asserted a violation of the Employment Retirement Income Security Act and claims of unjust enrichment and quantum meruit.
According to court filings, Open MRI has claimed Cigna's coverage denial violated the insurance coverage provisions of the Families First Coronavirus Response Act and the Coronavirus Aid Relief and Economic Security Act.
In February, Cigna asked the court to toss the suit, saying the lab has not identified whether it has legal rights to bring a lawsuit under the two federal statutes. The FFCRA and the CARES Act do not provide "a private right of action," and a violation of either statute is "not one of the very specific causes of action enumerated in ERISA," Cigna said.
On Tuesday, the lab said its suit does not bring allegations under the federal acts but seeks enforcement of certain provisions of the acts through its legal right under ERISA.
Denying medical providers a right to litigate after insurers refuse to pay COVID-19-related benefits would force the providers to go bankrupt or not be able to treat patients in need, it said.
The federal statutes were intended to facilitate COVID-19 treatment by removing legal and business hurdles faced by patients and providers, the lab said. The acts were enacted to make sure that patients can be diagnosed and treated more smoothly during the global pandemic, it added.
"It could hardly have been Congress' intention in enacting the CARES Act and the FFCRA as legislative remedies to the national pandemic to leave them as ineffectual gestures," it said.
According to the suit, between February 2020 and July, the lab sent invoices totaling $398,665 to Cigna for "diagnostic services and treatment related to coronavirus," but the insurer declined to make the payments.
Representatives for the parties could not be immediately reached for comment on Wednesday.
The lab is represented by Peter Nichols of Levine Desantis LLC.
Cigna is represented by E. Evans Wohlforth Jr. and Charlotte Howells of Gibbons PC.
The case is Open MRI and Imaging of RP Vestibular Diagnostics PA v. Cigna Health and Life Insurance Co., case number 2:20-cv-10345, in the U.S. District Court for the District of New Jersey.
--Editing by Janice Carter Brown.
For a reprint of this article, please contact reprints@law360.com.
