A recent Law 360 story by Brian Steele, “Cigna Seeks $155K Atty Fees in ‘Complex’ COVID Test Site Row”, reports that Cigna Health and Life Insurance Co. is seeking $154,700 in attorney fees after a Connecticut federal judge sanctioned a medical practice chain that is suing the insurer for allegedly failing to properly reimburse for policyholders' COVID-19 tests. Cigna, which is represented by Robinson & Cole LLP, cited the "complex and difficult" matter in its fee bid. It's one of a plethora of insurers that Murphy Medical Associates LLC has sued via separate dockets.
On Aug. 30, U.S. District Judge Janet Bond Arterton imposed sanctions on the plaintiffs after finding that they "have shown blatant and willful disregard for discovery deadlines" laid out in an order from March 2022, authorizing Robinson & Cole attorneys to seek fees. Cigna asked the court to order payment of $465 per hour for partners, $300 per hour for an associate and $180 to $206 for paralegals, reflecting a 25% discount off Robinson & Cole's negotiated rates.
"This case and the motion is complex and difficult," Cigna said in a memorandum supporting its motion. "The large volume of itemized claims also increased the demands of the case. This is especially true for the motion for sanctions, due to plaintiffs' decision to produce 100,000-plus pages of documents after Cigna had filed its motion."
Dr. Steven A. R. Murphy, Murphy Medical and three other practices in southwestern Connecticut sued Bloomfield, Connecticut-based Cigna in November 2020, alleging $9.3 million in damages connected to unpaid claims at their testing sites. A third amended complaint filed in December 2022 said that Cigna still owes the practice group more than $6 million.
In its memorandum, Cigna said that the plaintiffs were asserting a "novel claim alleging that they had a private right of action under the Families First Coronavirus Response Act" or the CARES Act pandemic relief law. The plaintiffs also sought relief under the Employee Retirement Income Security Act of 1974, as well as Connecticut's unfair trade and insurance practices act, while Cigna filed counterclaims including fraudulent misrepresentation and violation of the Connecticut Health Insurance Fraud Act. Cigna previously said that the plaintiffs were demanding $1,500 for tests while acknowledging that they only cost $200 to $600.
"Defending claims by out-of-network providers against managed care organizations for payment for health services is a specialized practice area, requiring expertise in the complex body of ERISA benefit law, as well as an understanding of the structure of health plans and the operations of managed care organizations," the memorandum said. "The fees charged by Robinson & Cole are also reasonable based on prevailing market rates and customary fees awarded in this district in similarly complex cases."
Cigna said that its counsel's firm had to perform extensive reviews and analysis of late discovery material, accounting for 75% of the time for which they are seeking compensation. Paralegals incurred the most billable hours at 519.3 out of 663, according to the memorandum.