By Dave Simpson

Law360 (April 16, 2021, 10:46 PM EDT) -- A Connecticut medical practice chain seeking $9.3 million in damages from Cigna for not paying for policyholders' COVID-19 testing is actually exploiting a national health crisis by overcharging for tests, the insurer fired back Friday in a motion to dismiss the federal court suit.

Cigna Health and Life Insurance Co. said that Murphy Medical Associates LLC is "price gouging" insurers by demanding $1,500 for in-house tests while acknowledging that they only cost $200 to $600. It urged the court to dismiss the coverage suit, initially filed by Dr. Steven A.R. Murphy and his medical practice chain in November.

"The amended complaint is long on rhetoric but woefully short on required facts," Cigna said. "In particular, the amended complaint does not identify a single one of the 'over 4,000' Cigna members it allegedly tested, and for whom it seeks payment. Neither is there any legal support for plaintiffs' contention that they have a direct right to sue health plans and plan administrators for bills for SARS-CoV-2 testing services."

Murphy told a Connecticut federal judge in November that Cigna has wrongfully refused to reimburse more than 4,400 of its patients, allegedly telling health plan holders that Murphy offers fraudulent testing sites and that the patients need to pay out of pocket if they go to his sites.

Murphy, who owns four health care practices, said he set up drive-thru and walk-in COVID-19 testing sites across southwestern Connecticut and the Hudson Valley in the spring. The sites had tested more than 28,000 people, including 3,000 uninsured patients from March 2020 to October, he added.

The primary care doctor said Cigna has denied claims and claim appeals before his practice was able to respond with Cigna's requests for medical records.

Cigna said Friday that it has a fiduciary duty to the plans it administers to confirm that millions of dollars in fees were legitimate and billed properly.

"Plaintiffs bragged of 'transform[ing]' their 'traditional medical practice overnight' by assembling 'the clinical and administrative staff needed to operate the [testing] sites,'" the insurer said. "Presumably such efforts included staff necessary to support billing functions."

Murphy's November complaint accuses Cigna of violating the Families First Coronavirus Response Act, the Coronavirus Aid, Relief and Economic Security Act, the Affordable Care Act, and various Employee Retirement Income Security Act provisions.

"While it is virtually impossible in this polarized political environment for our federal elected officials to agree on anything, they did agree on payment for COVID-19 testing and related services," Murphy said.

In the complaint, Murphy said Congress mandated plan carriers such as Cigna to reimburse providers for COVID-19-related tests, even if the provider is out of network. And the Affordable Care Act requires carriers to cover all emergency services, such as COVID-19 testing, without the need for prior authorization, he added.

Cigna failed to honor its obligation, and his practice only received a "token" amount of reimbursement for the COVD-19-related services, Murphy said. The carrier engaged in "a paperwork war of attrition" by demanding hundreds of thousands of pages of documents to delay and avoid its payment obligations, he alleged.

In the complaint, Murphy said he learned from patients and testing site sponsors that Cigna told them Murphy's practice is a "fraudulent enterprise," and that people are on their own for costs if they test at his sites. As a result of Cigna's malicious efforts, Murphy said, some cities and towns have refused to allow his practice to offer COVID-19 testing.

On Friday, Cigna rejected the notion that the suit was filed with its members in mind.

"This lawsuit has nothing whatever to do with protecting the interest of Cigna members in obtaining SARS-CoV-2 testing," it said. "As plaintiffs admit, 'the Murphy practice has not and will not bill a Cigna member ... for any of these services.' Thus, this dispute is simply about the financial interests of an out-of-network provider."

Murphy is represented by Roy W. Breitenbach, Barry B. Cepelewicz and Michael J. Keane Jr. of Garfunkel Wild PC.

Cigna is represented by Theodore J. Tucci, Jean E. Tomasco and Patrick W. Begos of Robinson & Cole LLP.

The case is Murphy Medical Associates LLC et al. v. Cigna Health and Life Insurance Co. et al., case number 3:20-cv-01675, in the U.S. District Court for the District of Connecticut.

--Additional reporting by Daphne Zhang. Editing by Jay Jackson Jr.

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