Plastic Surgery Ctr., P.A. v. Cigna Health & Life Ins. Co.

THE PLASTIC SURGERY CENTER, P.A., Plaintiff, v. CIGNA HEALTH AND LIFE INSURANCE COMPANY, et al., Defendants.

Civil Action No. 3:17-cv-2055-FLW-DEA

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

April 29, 2021

*NOT FOR PUBLICATON*

OPINION

WOLFSON, Chief Judge:

Plaintiff Plastic Surgery Center, P.A., sues Defendants Cigna Health and Life Insurance Company ("Cigna"), Sunrise Senior Living, LLC ("Sunrise"), and Access Plus Medical Benefits Gold Plan ("the Plan") (collectively, "Defendants") under the Employee Retirement Income Security Act of 1974 ("ERISA"), see 29 U.S.C. § 1001, et. seq., for underpaying on an out-of-network double mastectomy and bilateral breast reconstruction surgery. Defendants move for summary judgment on the grounds that Plaintiff has not shown ambiguity in the applicable insurance plan or an abuse of discretion under it. Plaintiff cross-moves for summary judgment, arguing that Plan terms require full reimbursement.¹ For following reasons, Defendants' Motion is GRANTED in part and DENIED in part, and Plaintiff's Motion is DENIED in full.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Plaintiff is a medical provider in New Jersey specializing in complex plastic surgery. On July 23, 2015, it performed a double mastectomy and bilateral breast reconstruction on K.D., a cancer patient. See Pl. Statement of Undisputed Material Facts ("Pl. SUMF"), ¶ 1; Def. Statement of Undisputed Material Facts ("Def. SUMF"), ¶ 2. Sunrise employed K.D. and insured her through its Plan, which established a certain level of coverage for out-of-network services. See Joint Appendix ("JA"), at 1, 11. Sunrise was the Plan Sponsor, see 29 U.S.C. 1002(16)(B), but delegated its decision-making authority to Cigna, who provided all claim administration. See JA, at 51. K.D. assigned her rights under the Plan to Plaintiff, including the right to receive payments pursuant to the Plan's benefits and to file any claims, appeals, or litigation.² Id. at 124; Def. SUMF, ¶ 9.

A. K.D.'s Plan and Plaintiff's Bills

Plaintiff billed Cigna over $180,000 for K.D.'s surgery. Specifically, Plaintiff billed $107,566 for Dr. Andrew I. Elkwood's services ("Claim 4015"), see JA, at 92, and $77,396 for Dr. Russel L. Ashinoff's services ("Claim 4009").³ See JA, at 94. K.D.'s surgery involved a "bilateral pectoralis elevation; bilateral serratus anterior flap; bilateral placement of tissue expander for reconstruction; bilateral placement of Allomax, 12 cm x 15 cm, on each side; bilateral complex closure, 30 cm on each side; and a bilateral spy angiography." Id. at 113-15. Because providers must disaggregate their services into discrete procedures and bill them under codes designed by the insurance industry, Plaintiff's bill to Cigna took the following form:

Code for Procedure

Dr. Elkwood's bill

19357 (RT)

- Right breast reconstruction

$19,350

19357 (LT)

- Left breast reconstruction

$19,350

15734 (RT)

- Muscle "flap" procedure

$19,350

15734 (LT)

- Muscle "flap" procedure

$19,350

15777 (RT)

- Implant/soft-tissue reinforcement

$10,864

15777 (LT)

- Implant/soft-tissue reinforcement

$10,864

15860

- Other repair re: integumentary system

$3,278

17999

- Angiography

$5,610

Total

$107,566

See JA, at 91-94.

K.D.'s Plan reimburses healthcare providers at different rates depending on whether they are in-network or out-of-network: 80% for in-network services and 50% of the "Maximum Reimbursable Charge" for out-of-network services, less the patient's deductible, coinsurance, and any applicable reductions. See JA, at 7, 12, 16; Def. SUMF, ¶ 4. The Plan defines the "Maximum Reimbursable Charge" as follows:

Maximum Reimbursable Charge is determined based on the lesser of the provider's normal charge for a similar service or supply; or

A percentage of a schedule that we have developed that is based upon a methodology similar to a methodology utilized by Medicare to determine the allowable fee for similar services within the geographic market. In some cases, a Medicare based schedule will not be used and the Maximum Reimbursable Charge for covered services is determined based on the lesser of:

• the provider's normal charge for a similar service or supply; or• the 80th percentile of charges made by providers of such service or supply in the geographic area where it is received as compiled in a database selected by the Insurance Company.

See JA, at 13. The Plan sets the "percentage of a schedule" at "150%." Id. This means that Cigna will calculate the "Maximum Reimbursable Charge" in a case involving out-of-network services by taking whatever is less between a provider's normal charges and 150% of a schedule similar to Medicare's, or, in "some cases," whatever is less between the provider's normal charges and the 80th percentile of charges for such services in the area. Regardless of the methodology it uses to calculate the "Maximum Reimbursable Charge," Cigna will pay out 50%.

An example is helpful at this point. Assume a provider's normal charge for a service is $50, the 80th percentile of charges in the provider's area is $75, a rate similar to the Medicare rate is $25, 150% of the Medicare-based rate is $37.50, the patient's deductible is $5.00, and there are no applicable reductions. Between the provider's normal charge ($50) and 150% of the Medicare-based rate ($37.50), Cigna will select the Medicare-based rate because it is less. Then Cigna will halve it ($18.75), subtract $5.00, and reimburse the provider $11.75. Assume instead that Cigna "will not use" the Medicare-based rate. Cigna would then select the provider's normal charge ($50) because it is less than the 80th percentile of similar charges in the area ($75), halve it ($25), subtract $5.00, and reimburse the provider $20.00.

Finally, the Plan provides the Plan Administrator with the discretionary authority to:

interpret and apply plan terms and to make factual determinations in connection with its review of claims under the plan. Such discretionary authority is intended to include, but not limited to, the determination of the eligibility of persons desiring to enroll in or claim benefits under the plan, the determination of whether a person is entitled to benefits under the plan, and the computation of any and all benefit payments. The Plan Administrator also delegates to Cigna the discretionary authority to perform a full and fair review, as required by ERISA, of each claim denial which has been appealed by the claimant or his duly authorized representative.

See JA, at 51; Def. SUMF, ¶ 8.

B. Cigna's Determinations on Plaintiff's Bill

Cigna responded to Plaintiff's bill as follows:

 Code for Procedure Outcome Cigna's Reason  19357 (RT)- Right breast reconstruction  Paid $711.62  "Maximum ReimbursableCharge" provision  19357 (LT)- Left breast reconstruction  Reduced by 1/2 to$623.70  "Multiple SurgicalReduction" provision  15734 (RT)- Muscle "flap" procedure  Denied in full  Included in Code 19357  15734 (LT)- Muscle "flap" procedure  Denied in full  Included in Code 19357  15777 (RT)- Implant/soft-tissue reinforcement  Paid $175.41  "Maximum ReimbursableCharge" provision  15777 (LT)- Implant/soft-tissue reinforcement  Paid $175.41  "Maximum ReimbursableCharge" provision  15860- Other repair re: integumentarysystem  Reduced by 1/2 to$45.50  "Multiple SurgicalReduction" provision  17999- Angiography  Reduced to $0  Not pre-approved Total $1,731.64   

See JA, at 12-13, 16,101, 108-109.

As detailed supra, Cigna denied Code 15734, which refers to a muscle "flap," because a provider may not bill for that procedure in conjunction with a breast reconstruction, to the extent that a reconstruction by definition includes a flap. See JA, at 63-65, 101-02; Def. SUMF, ¶ 15. In denying this Code, Cigna relied on its "Reimbursement Policy R09," as informed by the National Correct Coding Initiative ("NCCI"), a Medicare initiative. Cigna reduced Code 17999, which refers to an angiography—also known as a blood flow test—to $0 for failure to comply with the Plan's preapproval provision. See JA, at 168; Def. SUMF, ¶ 17. According to Cigna, althoughK.D. received preapproval for Codes 19357, 15777, and 15734,⁴ she did not request or receive it for Code 17999, even though the Plan requires it for in-patient hospital services regardless of whether they are medically necessary. See JA, at 25-26. Finally, after determining the Maximum Reimbursable Charge to be 150% of the Medicare rate exactly, Cigna reduced Code 19357 (LT), which refers to a left breast reconstruction, Code 15777, which refers to an implant, and Code 15860, which refers to an integumentary system repair, by half under the Plan's "Multiple Surgical Reduction" provision, which provides that "[m]ultiple surgeries performed during one operating session result in payment reduction of 50% to the surgery of lesser charge." See JA, at 12, 101; Def. SUMF, ¶ 18. Cigna then applied K.D.'s deductible, $1,071.56, to the amount covered by the Plan, $4,534.83, and paid Plaintiff half of the difference per the out-of-network rate: $1,731.64, or 1% of Plaintiff's bill. See JA, at 99-101; Def. SUMF, at ¶¶ 19-21.

Plaintiff appealed Cigna's determinations on February 23, 2016, specifically challenging its denial of Code 15734, the flap. See Def. SUMF, ¶ 30; JA, at 104-15. Cigna denied the appeal on March 31, 2016, stating that "[t]he denied service(s) do not warrant separate reimbursement given that [a flap] is considered inclusive to the primary procedure performed," i.e., the reconstruction. Def. SUMF, ¶ 16; JA, at 72-73. Cigna also rejected Plaintiff's modifier, which a provider may submit to show that it is entitled to an exception from ordinary reimbursement rules, because Plaintiff did not offer "documentation to support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury . . . not ordinarily encountered or performed on the same day by the same individual." SeeJA, at 65. To...