Federal judge declines to intervene in Cigna’s refusal to pay $3M No Surprises Act award

Last week, a federal court declined to intervene on a $3 million independent dispute resolution (IDR) dispute between Cigna and a provider group, where the former was ordered in arbitration to pay the amount to resolve allegations that it violated out-of-network reimbursement rules established by the No Surprises Act (NSA).

In the ruling, a U.S. District Court judge said East Coast Advanced Plastic Surgery, which filed the lawsuit, lacked standing under the law to file the complaint. While it was agreed that Cigna did not pay the $3 million award within 30 days, as required by provisions of the NSA, the court ruled that it had no right to intervene on IDR disputes.

After reviewing the complaint, a federal judge in the Southern District of New York granted Cigna’s motion to dismiss. It was concluded that the NSA contains no provision where awards stemming from dispute resolutions can be elevated outside the arbitration process, even if payments were not made as instructed.

While East Coast Advanced Plastic Surgery argued the judgments issued in IDR are part of federal law and thus subject to a ruling by relevant courts, the judge disagreed that the law grants any court such authority.

Instead, failure to pay would need to be something addressed by regulators, as Congress did not empower courts in the law to intervene.

Importantly, the ruling does not mean Cigna does not owe the $3 million. The judge did not vacate the conclusion made during the IDR proceeding, which is binding.

“The text and structure of the NSA make clear that it does not provide a private right of action to enforce payment awards obtained through the NSA’s IDR process. Although the NSA gives providers a right to payment from health plans for certain services, it delegates enforcement authority to multiple federal agencies and to states,” Judge Michael H. Park wrote.

“This statutory scheme reflects Congress’s intent that the NSA, including payment of IDR awards, be enforced through administrative action rather than private litigation.”

It’s unclear what happens from here, where the losing side of an IDR ruling refuses to pay. As the court implied, East Coast Advanced Plastic Surgery can still pursue regulatory enforcement, but that would be left to the bodies governing the dispute, such as the U.S. Department of Labor or the U.S. Department of Health and Human Services.

The provider could also elevate the case to the U.S. Supreme Court, should they be willing to hear the case.