Advanced Ambulatory Surgical Center, Inc. v. Cigna Healthcare of Illinois, Inc.
Filing
118
MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 6/13/2017:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ADVANCED AMBULATORY SURIGAL
CENTER, INC., an Illinois
Corporation,
Plaintiff,
Case No.
v.
13 C 7227
Judge Harry D. Leinenweber
CONNECTICUT GENERAL LIFE
INSURANCE CO., a Delaware
Corporation,
Defendant.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant’s Motion for Partial Summary
Judgment [ECF No. 89].
For the reasons stated below, the Court
grants Defendant’s Motion.
I.
A.
BACKGROUND
Factual Background
The following facts are undisputed unless noted otherwise.
Plaintiff Advanced Ambulatory Surgical Center, Inc. (“AASC”) is
a state-licensed outpatient surgery center located in Chicago,
Illinois.
surgeon
(ECF No. 101 (“Pl.’s SAUF”) ¶ 1 & Ex. 1 ¶ 3.)
wants
paperwork,
to
perform
including
insurance card.
a
a
procedure
photocopy
of
at
the
AASC,
she
When a
submits
patient’s
health
(ECF No. 90 (“Def.’s SUF”) ¶¶ 30-31.)
Before
it
renders
insurance
any
services,
coverage
seeks
respect
with
AASC
to
to
verify
the
the
planned
patient’s
procedure
by
calling the company who issued the patient’s insurance policy
or,
as
the
case
may
(Pl.’s SAUF ¶ 2.)
be,
administers
the
policy’s
benefits.
Indeed, AASC rarely treats patients who lack
insurance. (Campos Tr. 14:5-15; Rubio Tr. 21:13-23.)
During
these calls, AASC employees obtain the patient’s basic benefits
information and record it on a one-page insurance verification
form. (Def.’s SUF ¶ 31; Pl.’s SAUF ¶ 3; see, id. at Ex. 1.)
AASC
treats
administered
Company,
patients
by
Inc.
insured
Defendant
(“Cigna”),
under
health
Connecticut
General
although
provider with respect to Cigna plans.
it
is
an
benefit
Life
plans
Insurance
out-of-network
(Def.’s SUF ¶ 1.)
Cigna provides claims administration and insurance services
for health
benefit
plans
that
employers
offer.
Under
Cigna
plans, covered individuals have the option to receive medical
care from in-network providers, who have contracted with Cigna
to accept a negotiated schedule of fees for medical services,
and out-of-network providers, who formulate their own menu of
services and fees. (Def.’s SUF ¶¶ 5-6.)
To be eligible for
benefits, a Cigna plan member typically must pay a portion of
the
covered
health
care
expenses
either
in
the
form
of
coinsurance (a fixed percentage of the covered charges), a copay
- 2 -
(a
flat
per-service
fee),
or
a
deductible
(the
total
dollar
amount of covered expenses that the member must pay during the
calendar year before the plan’s benefits kick in).
(Id. ¶¶ 7,
9.)
To
nudge
insurance
policyholders
companies
toward
impose
in-network
higher
providers,
patient
most
contribution
requirements (known as “cost shares”) with respect to services
rendered
by
advantage,
required
out-of-network
some
patient
forgiveness”
–
providers.
out-of-network
contributions
billing
Seeking
providers
and
patients
and
engage
simply
reimbursement under a plan as payment in full.
¶ 10.)
as
competitive
disregard
instead
nothing
a
in
these
“fee
accepting
(Def.’s SUF
This practice actually reverses the intended incentives,
patients
who
receive
treatment
from
out-of-network
fee
forgivers actually pay less out-of-pocket than they otherwise
would
for
the
same
in-network
health
care
services.
To
discourage fee forgiveness, many benefit plans, such as those
administered by Cigna, refuse to cover “charges which you are
not obligated to pay or for which you are not billed or for
which
you
would
not
have
been
billed
covered under this plan.” (Id. ¶ 11.)
except
that
they
were
In addition, Cigna tries
to parry the lunge of fee forgiveness by limiting coverage to
“covered expenses,” defined as expenses actually incurred by the
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patient after he or she becomes insured under a given plan. (Id.
¶ 12.)
Since
verification
2005,
calls
Cigna
with
a
has
precipitated
disclaimer.
Until
all
benefits
February
2013,
Cigna’s disclaimer went:
The following information does not guarantee coverage
or payment.
The governing document for a patient’s
coverage is their Summary Plan Description.
Payment
for services will be based on medical necessity, plan
provisions, and eligibility at the time of service.
(Def.’s SUF ¶ 25.)
Cigna slightly altered the wording of the
disclaimer in February 2013, and since then it has announced:
By continuing with this call, you understand, accept,
and
agree
that
the
following
covered
services
information does not guarantee coverage or payment and
is subject to all benefit plan provisions.
Please
refer to the Summary Plan Description for coverage.
Payment for services will be based on medical
necessity, plan provisions, including limitations and
exclusions, and eligibility at the time of service.
(Id. ¶ 26.)
Both disclaimers ran before the inquiring provider
could access Cigna’s automated benefits system or speak to a
live support representative. (Id. ¶ 27.)
During the time period at issue, two AASC employees called
Cigna to verify patient benefits prior to a scheduled procedure:
Yuri
Campos
acknowledged
(“Campos”)
that,
and
whenever
Kathy
she
Rubio
called
(“Rubio”).
Cigna,
she
Campos
heard
a
disclaimer warning that payment on any particular claim was not
- 4 -
guaranteed; Rubio could not recall the content of the disclaimer
at
her
deposition
but
did
called Cigna. (Id. ¶ 38.)
not
deny
hearing
it
whenever
she
Both remained on the line long enough
to speak with a live Cigna agent who could verify the patient’s
insurance information.
Joanna Brzostowska (“Brzostowska”), who
oversees the company’s billing and collection processes, did not
supervise Campos or Rubio while they were making these calls and
thus never heard what Cigna’s agents said in response to their
questions.
(Pl.’s SAUF at Ex. 1 ¶¶ 1-2; Brzostowska Tr. 26:22-
27:9.)
After
identifying
various
personal
information
of
the
patient, Campos or Rubio recorded what the Cigna agent told them
about
the
patient’s
out-of-network
plan
benefits
on
the
patient’s insurance verification form, including the patient’s
deductible, amount of deductible met, “Coverage (%),” maximum
out-of-pocket
maximum
for
amount,
amount
outpatient
of
surgery
¶ 31; Pl.’s SUF at Ex. 1.)
the
(if
maximum
met,
applicable).
and
annual
(Def.’s
SUF
In addition, they would sometimes
indicate on the form whether the insurer’s reimbursement was
based on “Usual & Customary” rates or Medicare rates and whether
the plan was employer-sponsored. (Ibid.)
fill
in
a
portion
of
the
form
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Finally, they would
indicating
exclusions
or
restrictions on the policy, either for surgical procedures or
specific body parts or specialties. (Ibid.)
On these calls, Cigna’s representatives made no promises or
guarantees of payment, and neither Campos nor Rubio were led to
believe
that
reimbursement
render.
AASC
for
was
the
certain
surgical
to
receive
services
it
any
would
specific
ultimately
(Def.’s SUF ¶¶ 32-33; see also, Brzostowska Tr. 265:7-
18 (denying “aware[ness] of any insurance verification call in
which a Cigna customer service representative promised or agreed
to pay all or part of the billed charges”).)
Neither provided
Cigna with estimates or exact amounts of billed charges, because
when they placed these calls AASC did not know what its billed
charges would be. (Ibid.)
for
reimbursement
Neither Campos nor Rubio asked Cigna
estimates,
because
that information. (Id. ¶ 34.)
Cigna
would
not
release
Campos and Rubio testified to
their general understanding that the benefits information Cigna
verified,
such
as
the
percentage
they
recorded
on
the
verification forms in the “Coverage (%)” field, conveyed to them
that the patients’ procedures would be covered at those levels.
(Id. ¶ 39.)
Campos believed that this percentage referred to
the allowed amount; Rubio understood it to apply either to the
usual and customary amount determined by the insurance company
or a Medicare-based amount; and Brzostowska generally testified
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that
Cigna
wrongfully
failed
to
pay
a
AASC’s billed charges. (Id. ¶¶ 28, 39.)
certain
percentage
of
None of the three could
recall a conversation in which a Cigna representative promised
or agreed to pay all or part of AASC’s allowed, billed, usual
and customary, or Medicare-based charges. (Id. ¶¶ 28, 36-37.)
After Cigna verified the percentage at which the patient’s
plan
covered
typically
AASC’s
schedule
the
out-of-network
patient
for
procedure,
surgery.
On
AASC
the
would
day
of
surgery, the patient assigned her health insurance benefits to
AASC. (Def.’s SUF ¶¶ 40-41.)
After the surgery, Brzostowska
would prepare an insurance claim and submit it on behalf of AASC
to Cigna. (See, e.g., Campos Tr. 36:12-38:12.)
On October 7, 2010, Allyson Day (“Day”) of Cigna’s Special
Investigations Unit initiated an investigation into whether AASC
was engaging in fee forgiveness. (Def.’s SUF ¶ 12.)
that
investigation
Cigna’s Motion.)
are
largely
irrelevant
to
(Details of
resolution
of
On October 21, 2010, Day sent AASC a letter
seeking information regarding “your policy on the collection of
patient
co-pay
collected
and/or
“payment
on
coinsurance”
the
member’s
responsibility.” (Id. ¶ 14.)
Cigna
eventually
and
asking
full
out
whether
of
AASC
network
Hearing no response from AASC,
implemented
a
fee-forgiveness
protocol
effective December 21, 2010, under which Cigna operated on the
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assumption that AASC was forgiving its patients’ out-of-network
cost shares, thus triggering the exclusion in Cigna plans for
expenses that a plan member is not obligated to pay personally.
(Id. ¶ 15.)
Day memorialized all this in a December 21, 2010
letter to Brzostowska. (Ibid.)
example of the new protocol:
$15,000
for
which
AASC
The letter recited the following
upon receiving an AASC claim for
charged
reimburse AASC $0. (Id. ¶ 16.)
that
AASC’s
claims
would
the
patient
$0,
Cigna
would
Day’s letter concluded by noting
continue
to
be
denied
on
fee-
forgiveness grounds until it submitted clear evidence that the
charges shown on the claims “are the actual charges for the
services rendered” and that Cigna plan member “is required to
pay
the
full
applicable
out-of-network
co-insurance
and/or
deductible.” (Ibid.)
Brzostowska
letter.
denies
Instead,
attachment
to
she
Cigna’s
contemporaneously
claims
to
have
correspondence
receiving
received
with
it
the
Day’s
as
an
Illinois
Department of Insurance (“DOI”), which was forwarded to AASC in
response to complaints AASC filed against Cigna in 2011 over
non-payment of claims. (Def.’s SUF ¶¶ 15-19.)
AASC’s
Complaint,
Cigna
personnel
had
sent
(In response to
the
DOI
letters
asserting that, because of AASC’s fee-forgiving practices, the
standard exclusion in Cigna’s plans for charges a member is not
- 8 -
obligated to pay barred coverage for AASC’s claims. (Id. ¶ 20.))
Both
Brzostowska
and
AASC’s
CEO,
Sverko
Hrywnak
(“Hrywnak”),
testified that AASC had notice of Day’s letter by October 4,
2011, when outside counsel for AASC sent Day a demand letter
denying that AASC was engaged in fee forgiveness. (Id. ¶¶ 2223.)
Day responded to counsel’s letter, reiterating that no
payments were due AASC under the plans because its practice of
waiving patient cost shares triggered the standard exclusion for
charges a plan member is not personally obligated to pay. (Id.
¶ 24.)
For
its
forgiveness
part,
as
a
AASC
general
denies
that
practice,
it
ever
instead
engaged
claiming
in
fee
that
it
attempted to collect the out-of-network cost shares listed on
the explanation of benefits it received for each Cigna patient.
(Pl.’s SAUF ¶¶ 6-7.)
When an indigent patient was unable to
pay,
“a
AASC
would
grant
case-by-case
charity
write
off”
their cost shares. (ECF No. 100 (“Pl.’s Mem.”) at 2.)
after
October
Despite
4,
continued
Cigna’s
2011,
fee
placing
the
status
forgiveness
verification
quo
protocol,
calls
to
largely
Even
persisted.
Campos
Cigna
of
and
before
Rubio
AASC
rendered services and filling in patient verification forms with
the
benefits
information
the
Cigna
representative
provided.
AASC continued to bill Cigna as before and write off out-of- 9 -
network cost shares (whether on a one-off charity basis or as a
matter of course); Cigna would sometimes pay or have its agents
negotiate the resulting claims. (Pl.’s SAUF ¶ 10.)
The insurance policies assigned to AASC and at issue in
this case fall into two camps:
those that Cigna issued, and
those that it did not issue but for which it serves as claim
administrator. (See, Def.’s SUF ¶¶ 42-43.)
those policies that Cigna did not:
Two entities issued
the State of Illinois and
the Metropolitan Pier and Exposition Authority. (Ibid.)
Cigna
does not insure the State’s policies, which are instead selfinsured
health
plans.
(Id.
¶
43
(noting
that
the
State’s
benefits handbook informs employees of “the State’s self-insured
health plan”).)
The same is the case for the Metropolitan Pier
and Exposition Authority.
(Id. at Ex. 15 (“THIS DOCUMENT MAY
USE WORDS THAT DESCRIBE A PLAN INSURED BY CONNECTICUT GENERAL.
BECAUSE
THE
PLAN
IS
NOT
INSURED
BY
CONNECTICUT
GENERAL,
ALL
REFERENCES TO INSURANCE SHALL BE READ TO INDICATE THAT THE PLAN
IS SELF-INSURED.”).)
B.
Procedural Background
AASC initiated this lawsuit on September 5, 2013 in the
Circuit Court of Cook County, seeking reimbursement for each of
the outstanding claims Cigna refuses to pay.
case
to
this
Court
on
grounds
- 10 -
that
(1)
Cigna removed the
AASC’s
claims
are
preempted by the Employee Retirement Income Security Act, 29
U.S.C. § 1001 et seq. (“ERISA”), and (2) there is diversity
under 28 U.S.C. § 1332.
Since
brings,
then,
in
AASC
addition
has
to
twice
its
amended
federal
its
ERISA
Complaint
claim,
and
counts
of
promissory estoppel and fraud as well as a count based on 215
Ill. Comp. Stat. 5/155 for vexatious and unreasonable delay in
settling insurance claims.
claims
cast
Cigna
AASC’s promissory estoppel and fraud
representatives’
statements
to
Campos
and
Rubio as actionable promises, on which AASC reasonably relied,
that
Cigna
would
pay
a
certain
percentage
of
incurred in providing services to plan members.
its
charges
Cigna now moves
for partial summary judgment on AASC’s state-law claims.
II.
On
summary
LEGAL STANDARD
judgment,
this
Court
draws
all
facts
inferences from them in favor of the non-moving party.
e.g.,
Laskin
v.
Siegel,
728
F.3d
731,
734
(7th
Cir.
and
See,
2013).
Summary judgment is appropriate only “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).
FED. R. CIV.
The party seeking summary judgment has the burden of
establishing that there is no genuine dispute as to any material
fact.
See, Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
- 11 -
A
genuine
dispute
as
to
any
material
fact
exists
“if
the
evidence is such that a reasonable jury could return a verdict
for the nonmoving party.”
U.S. 242, 248 (1986).
Anderson v. Liberty Lobby, Inc., 477
“To survive summary judgment, the non-
moving party must show evidence sufficient to establish every
element that is essential to its claim and for which it will
bear
the
burden
of
proof
at
trial.”
Life
Plans,
Inc.
v.
Security Life of Denver Ins. Co., 800 F.3d 343, 349 (7th Cir.
2015).
III.
DISCUSSION
Cigna moves for partial summary judgment on AASC’s statelaw
claims,
material
arguing
fact
that
precluding
there
exists
judgment
in
promissory estoppel and fraud claims.
claims
that
undisputed
evidence
no
genuine
its
dispute
favor
on
of
AASC’s
More specifically, Cigna
establishes
the
lack
of
any
unambiguous promise or actionable fraudulent statement to Campos
or
Rubio
and,
unreasonable.
in
any
Cigna
event,
further
that
any
contends
reliance
that
by
relief
AASC
was
under
the
Illinois Insurance Code, 215 Ill. Comp. Stat. 5/155, fails as a
matter of law because AASC’s claims under the statute are either
preempted by ERISA or concern benefit plans for which Cigna is
not an “insurer” within the meaning of the statute.
- 12 -
A.
Promissory Estoppel
The parties agree that AASC’s promissory estoppel and fraud
claims are governed by Illinois law.
To survive Cigna’s Motion
for Summary Judgment, AASC must present evidence from which a
trier of fact could find that (1) Cigna made “an unambiguous
promise,”
(2)
AASC
“relied
on
such
promise,”
(3)
AASC’s
“reliance was expected and foreseeable” by Cigna, and (4) AASC
“relied on the promise to its detriment.”
Newton Tractor Sales,
Inc. v. Kubota Tractor Corp., 906 N.E.2d 520, 523-24 (Ill. 2009)
(citation omitted).
Cigna
attacks
the
first
and
third
elements
of
AASC’s
promissory estoppel claim, arguing that (1) it never made an
“unambiguous promise” on benefits verification phone calls with
Campos and Rubio to pay a specific percentage of AASC’s charges
and (2) even if it did, AASC’s reliance on any such promise was
unreasonable in light of both the pre-recorded disclaimer that
played
before
they
spoke
with
a
live
Cigna
agent
and
the
absurdity of assuming that Cigna would agree sight unseen to pay
a fixed percentage of any and all charges AASC incurred.
also
argues
that
AASC
is
barred
from
asserting
a
Cigna
promissory
estoppel claim because it received an assignment of ERISA plan
benefits from its patients.
The Court does not reach Cigna’s
unreasonable reliance and assignment arguments, because it is
- 13 -
undisputed
that
its
agents
made
no
unambiguous
promise
of
payment to AASC.
First, all the evidence indicates that Cigna agents did not
explicitly promise or agree to reimburse AASC.
between
the
parties
that
there
was
no
Such agreement
explicit
promise
distinguishes this case from Connecticut General Life Ins. Co.
v. Grand Avenue Surgical Center, Ltd., 181 F.Supp.3d 538 (N.D.
Ill. 2015), in which the court denied summary judgment on the
unambiguous
promise
issue
based
on
testimony
that
Cigna
“responded to these inquiries by promising to cover a specific
percentage of [the plaintiff’s] billed charges.”
Id. at 544-45
(emphasis added) (“[A] reasonable trier of fact could credit
Jafari’s testimony and conclude that [Cigna] promised to pay
[the plaintiff’]s billed charges at a specific percentage.”).
AASC has adduced no such evidence in this case.
Rather, the salient question here is whether a Cigna agent,
purely by verifying the plan benefits of an AASC patient, made
an
unambiguous
promise
to
percentage of its charges.
does
not
require
an
reimburse
AASC
at
the
stated
AASC is correct that Illinois law
express
promise
-
only
an
unambiguous
promise - to create a triable issue of fact on a promissory
estoppel claim.
See, Bank Comp. Network Corp. v. Continental
Illinois Nat’l Bank & Trust Co., 442 N.E.2d 586, 590-91 (Ill.
- 14 -
App. 1982) (“[T]he promise essential to a claim of promissory
estoppel need not be express, only unambiguous.”), cited with
approval, Goldstick v. ICM Realty, 788 F.2d 456, 462-63 (7th
Cir.
1986).
support
for
On
the
finding
other
a
hand,
“distinct
the
evidence
intention
furnishes
common
to
no
both
[parties]” such as would transform Cigna’s mere verification of
a patient’s benefits into a promise to pay for services.
See,
e.g., DAC Surgical Partners P.A. v. United Healthcare Servs.,
Inc., No. 4:11 C 1355, 2016 WL 7157522, at *4 (S.D. Tex. Dec. 7,
2016) (“[E]ven assuming that it was [the provider’s] practice to
make verification calls, the calls were actually made, and the
insurance was verified, that verification was not the same as a
promise of payment (see above).
United’s alleged promises of
payment (not their verifications of coverage) are the crux of
this case.”); Tenet Healthsystem Desert, Inc. v. Fortis Ins.
Co., Inc., 520 F.Supp.2d 1184, 1193-94 (C.D. Cal. 2007) (finding
that health insurer did not manifest intent to pay for health
provider’s
services
merely
by
verifying
insured’s
coverage
status for medical provider); Cedars Sinai Med. Ctr. v. Mid-West
Nat’l Life Ins. Co., 118 F.Supp.2d 1002, 1008 (C.D. Cal. 2000)
(rejecting hospital’s contention that “verification of coverage
was
a
promise”
to
pay
for
patient’s
- 15 -
“covered
treatment”;
“[W]ithin
the
medical
insurance
industry,
an
insurer’s
verification is not the same as a promise to pay.”).
An Illinois state court case is on all fours with this one.
In Centro Medico Panamericano, Ltd. v. Laborers’ Welfare Fund,
33
N.E.3d
691
(Ill.
App.
2015),
the
court
upheld
the
trial
court’s grant of summary judgment to the defendant insurer on an
out-of-network provider’s promissory estoppel claim.
case,
the
insurer
plaintiff
to
According
verify
to
the
there
the
placed
patient’s
plaintiff’s
pre-procedure
coverage.
insurance
As in this
calls
Id.
at
to
the
692-93.
verification
forms
summarizing these calls, the insurer’s representative confirmed
coverage,
provided
disclosed
the
the
benefit
patient’s
levels
patient’s plan. Id. at 693-94.
and
required
cost
percentages
shares,
stated
in
and
the
Because the plaintiff offered no
evidence that the insurer made an oral promise of reimbursement
or indeed did anything more than confirm coverage as indicated
on
the
forms,
summary
judgment
to
the
defendant
plaintiff’s promissory estoppel claim was proper.
on
the
Id. at 694-
95. (In a different suit brought by the same provider, the court
similarly held that a third-party insurance administrator did
not, by merely informing the plaintiff that coverage would be 60
percent, make an unambiguous promise to pay that percentage of
the provider’s billed charges.
See, Centro Medico Panamericano,
- 16 -
Ltd. v. Benefits Mgmt. Grp., Inc., 61 N.E.3d 160 (Ill. App.
2016).)
To the extent Laborers’ Welfare Fund conflicts with Chatham
Surgicore, Ltd. v. Health Care Serv. Corp., 826 N.E.2d 970, 976
(Ill. App. 2005) (finding that podiatric facility stated a claim
for promissory estoppel by alleging that insurer promised to pay
charges
when
dispositive.
it
verified
coverage),
the
latter
case
is
not
Chatham, unlike Laborers’ Welfare, was not decided
at summary judgment but instead at the motion-to-dismiss stage.
What is more, the case here for summary judgment is stronger
than it was even in Laborers’ Welfare Fund, as the insurer there
could not point to a disclaimer of the sort that Cigna employed
here before its agents spoke with Campos or Rubio.
Court
need
not
reach
the
disclaimer’s
Although the
import
on
the
reasonableness of AASC’s reliance, its ubiquity is probative of
whether the parties shared a common intention that Cigna, by
verifying benefits, was promising to pay.
Federal cases are also in accord.
In Ambulatory Infusion
Therapy Specialists, Inc. v. UniCare Life and Health Ins. Co.,
Civ. No. H-06-1857, 2007 WL 1520994 (S.D. Tex. May 22, 2007),
for example, an ambulatory center’s president called an insurer
to pre-verify a patient’s coverage and subsequently received a
faxed document describing the patient’s out-of-network benefit
- 17 -
levels.
Id.
at
*1.
Based
on
the
phone
call,
the
provider
claimed a general understanding that it would receive 75 percent
of
its
claim
for
the
procedure
but
also
admitted
that
the
verification ultimately depended on policy terms she had not
seen
or
requested.
Id.
at
*2-3.
The
court
granted
summary
judgment to the insurer on the provider’s promissory estoppel
claim, because the provider failed to adduce evidence that the
insurer
promised
during
the
pre-verification
call
to
pay
75
percent of the provider’s claim. Id. at *3.
The Court does not doubt the sincerity of AASC’s refrain
that these calls are indispensable to its practice and that AASC
would have declined to go forward with a patient’s surgery if
Cigna had not confirmed the availability of benefits (or had
specified only a de minimis reimbursement percentage).
AASC
is
asking
that
fact
to
prove
too
much;
However,
confirming
the
availability and details of a patient’s insurance benefits is
not a concomitant promise of payment.
Indeed, if every time an
insurer’s agent verifies coverage to a provider she binds the
insurer to payment of a subsequent associated claim on the exact
same
terms,
insurers
would
doubtless
valuable service to providers.
even
greater
uncertainty
in
cease
offering
this
In turn, this would engender
our
already
fraught
health
care
system; without a ready means of verifying a patient’s coverage,
- 18 -
providers might end up losing vast sums of money by treating
uninsured or underinsured patients – not to mention the expense
in time of preparing and submitting doomed claims.
AASC would
seem particularly hard-hit in this scenario, as it rarely (if
ever) opts to treat patients who lack insurance.
For
all
the
above
reasons,
Cigna’s
Motion
for
Partial
Summary Judgment is granted as to AASC’s promissory estoppel
claim.
B.
Fraud
Establishing actionable fraud under Illinois law requires a
showing that Cigna “(i) made a false statement of material fact;
(ii) knew or believed the statement to be false; (iii) intended
to and, in fact, did induce the plaintiff to reasonably rely and
act on the statement; and (iv) caused injury to the plaintiff.”
Reger Dev., LLC v. National City Bank, 592 F.3d 759, 766 (7th
Cir. 2010) (citing Redarowicz v. Ohlendorf, 441 N.E.2d 324, 331
(Ill. 1982)); accord, Connick v. Suzuki Motor Co., Ltd., 675
N.E.2d 584, 591 (Ill. 1996).
Cigna’s
statements
about
Because AASC does not claim that
a
plan
member’s
benefits
were
themselves false or fraudulent, but instead that they implied a
promise of future conduct, AASC’s fraud count is thus one for
promissory fraud.
As such, AASC must also meet the additional
requirement of showing a “scheme to defraud.”
- 19 -
Association Ben.
Servs., Inc. v. Caremark RX, Inc., 493 F.3d 841, 853 (7th Cir.
2009).
For AASC to survive summary judgment, there must at least
be a factual dispute as to whether “when the promise was made,
the promisor had no intent to fulfill it.”
493
F.3d
at
explored
853.
above,
But
that
AASC
Cigna
does
agents
not
made
Ass’n Ben., supra,
have
any
evidence,
statements
that
as
were
understood as a guarantee or promise regarding future conduct.
Rather, everyone agrees that the information conveyed on the
calls was limited to accurate representations of existing fact –
namely,
what
provided.
insurance
benefits
a
particular
patient’s
plan
Statements summarizing a patient’s insurance benefits
on pre-verification calls as a matter of law fall short of a
promise to pay.
*4;
Laborers’
Healthsystem,
See, e.g., DAC Surgical, 2016 WL 7157522, at
Welfare
520
Fund,
F.Supp.2d
33
at
N.E.3d
1193-94;
at
694-95;
Cedars
Sinai,
Tenet
118
F.Supp.2d at 1008; Laborers’ Welfare Fund, 33 N.E.3d at 694-695.
Other than testimony consistent with the facts of those cases –
for example, that AASC’s decision to proceed with a patient’s
surgery depended on getting a verification of benefits - AASC
has adduced no evidence that these statements of existing fact
somehow conveyed to listeners a promise of future conduct (i.e.,
reimbursement).
As such, there is no actionable fraud.
- 20 -
At the motion to dismiss stage, the Court credited AASC’s
allegations “that Cigna, on multiple occasions, misrepresented
that it would reimburse AASC for its services, despite having no
intention
of
ever
making
good
on
its
promise.”
Advanced
Ambulatory Surgical Ctr., Inc. v. Cigna Healthcare of Illinois,
No. 13 C 7227, 2014 WL 4914299, at *4 (N.D. Ill. Sept. 30,
2014).
While these allegations satisfied the promissory fraud
pleading requirements, discovery has shown that neither Campos
nor Rubio heard anything resembling a promise or even leading
them
to
Instead,
believe
the
that
factual
reimbursement
allegations
in
would
AASC’s
be
guaranteed.
Complaint
appear
supported only by a general understanding on the part of Campos
and
Rubio
–
as
well
as
Brzostowska
and
Hrywnak,
who
lack
personal knowledge of the calls – that the context of Cigna’s
statements suggested a commitment to pay.
To the extent it is
not
factual
a
legal
argument
equation
of
benefits
divorced
from
the
masquerading
verification
express,
as
with
undisputed
a
a
promise
contents
issue,
to
of
this
pay
is
Cigna’s
statements and is contradicted by every other bit of Campos’s
and Rubio’s testimony - to say nothing of Cigna’s own evidence.
It does not suffice to create a triable issue as to whether
Cigna is liable for promissory fraud.
- 21 -
As with its promissory estoppel claim, AASC has adduced no
evidence in support of its promissory fraud claim that creates a
triable
issue
on
whether
the
Cigna
agents
who
verified
a
patient’s health insurance benefits promised associated future
payment.
The Court is thus compelled to grant summary judgment
to Cigna on AASC’s promissory fraud count.
C.
Illinois Insurance Code Claim
AASC’s final state-law claim invokes the Illinois statute
that permits a court to tax attorneys’ fees and other costs in
an action “by or against a company wherein there is in issue the
liability of a company on a policy or policies of insurance or
the amount of the loss payable thereunder.”
Stat. 5/155.
215 Ill. Comp.
Illinois law limits liability under Section 155 to
insurers; it does not allow recovery against non-insurers.
See,
e.g., Cramer v. Ins. Exch. Agency, 675 N.E.2d 897, 899 (Ill.
1996)
(concluding
that
the
statute
was
designed
to
punish
insurers); Cummings Foods, Inc. v. Great Central Ins. Co., 439
N.E.2d
37,
plaintiff’s
44
(Ill.
claim
App.
1982)
“requesting
(affirming
punitive
dismissal
damages
of
against
. . . noninsurers” because “[t]he evident purpose of section 155
was to provide an insured with the remedy against an insurer
under circumstances where the issue is the amount of loss, or
the liability of the insurer on a policy of insurance”); see
- 22 -
also,
Savino
Del
Bene,
U.S.A.,
Inc.
v.
Hartford
Fin.
Servs.
Grp., Inc., No. 11 C 6103, 2012 WL 3961224, at *1 (N.D. Ill.
Sept.
7,
Section
2012)
155
is
omitted).
company”
(“Illinois
limited
The
law
is
clear
specifically
Illinois
to
Insurance
to
“include
a
association,
society,
order,
that
insurers.”)
Code
corporation,
liability
defines
company,
individual
or
under
(citation
“insurance
partnership,
aggregation
of
individuals engaging in or proposing or attempting to engage in
any
kind
of
or
of
exchanging
insurance
reciprocal
surety
or
inter-insurance
individuals,
partnerships
and
Stat.
Section
provides
5/2.
succeed
to
the
155
same
business,
contracts
corporations.”
position
of
recourse
the
including
215
to
between
Ill.
assignees
insured.
the
See,
Comp.
that
e.g.,
LoStatewide Ins. Co. v. Houston Gen. Ins. Co., 920 N.E.2d 611,
625 (Ill. App. 2009); Garcia v. Lovellette, 639 N.E.2d 935, 937
(Ill. App. 1994).
As
an
initial
insofar
as
it
matter,
relates
to
AASC’s
services
ERISA-governed health plans.
*3
(also
collecting
cases).
§
155
claim
provided
to
is
preempted
patients
with
See, Advanced, 2014 WL 4914299, at
The
question
is
trickier
with
respect to non-ERISA patients – that is, those whose plans are
governed by state law.
AASC does not dispute that the only
governmental plans at issue in this case are those maintained by
- 23 -
the State of Illinois and the Metropolitan Pier and Exposition
Authority.
it
is
Cigna argues for summary judgment on the basis that
merely
the
third-party
administrator
for
these
funded policies, not an “insurer” under Section 155.
state-
Although
it failed to furnish the relevant authority, Cigna is correct.
There is something of a fine line here.
insurer’s
agent
administrator
–
-
such
may
as
an
constitute
The acts of an
appraiser
or
unreasonable
third-party
and
vexatious
conduct under Section 155 for purposes of an insured’s action
against the insurer.
See, e.g., McGee v. State Farm Fire and
Cas. Co., 734 N.E.2d 144, 155 (Ill. App. 2000) (“An appraiser’s
failure to agree to the selection of an umpire may constitute
unreasonable and vexatious conduct and may be attributed to an
insurance
company
agent.”);
Green
v.
when
the
Int’l
appraiser
Ins.
Co.,
acts
605
as
the
N.E.2d
insurer’s
1125,
1129-30
(Ill. App. 1992) (denying summary judgment to insurer based on a
material issue of fact as to whether an appraiser unreasonably
delayed as insurer’s agent and at its behest).
AASC,
however,
is
that
its
actionable
The problem for
(i.e.,
non-preempted)
Section 155 claims derive from self-funded policies issued by
state entities that are not parties to this suit.
AASC is not
seeking to attribute Cigna’s conduct as an agent to the policy
- 24 -
issuers
in
a
suit
against
them,
but
is
instead
proceeding
against the noninsurer itself.
Because Cigna does not insure the policies of the patients
at
issue
(of
whose
claims
AASC
is
assignee),
“insurer” within the meaning of Section 155.
it
is
not
an
Other courts have
similarly declined to extend Section 155 liability beyond the
issuer of the insurance policy.
See, e.g., Cuneo, Gilbert &
LaDuca, LLP v. Carolina Cas. Ins., Co., No. 14 C 4061, 2016 WL
8711487, at *3 (N.D. Ill. July 22, 2016) (granting motion to
dismiss as to third-party claims examiner that participated in
denial of coverage to insured plaintiff).
reached in Cuneo obtains here:
The same conclusion
the State of Illinois and the
Metropolitan Pier and Exposition Authority, not Cigna, are the
“insurers” of the only non-ERISA policies in this case.
Doubtless
AASC
will
protest
that
the
Court
previously
denied Cigna’s Motion to Dismiss the state-law claims on these
grounds.
See, Advanced, 2014 WL 4914299 at *5 (“[T]he Court
fails
see
to
policies
at
how
issue
[Cigna’s
were
contention
funded
by
that
insurers
several
other
than
of
the
Cigna]
serves as a basis for dismissal, since Cigna admits that it
issued at least some of the policies involved in this case.”).
However, that was because discovery had not revealed what it has
now:
that the only non-ERISA plans at issue in this case are
- 25 -
self-funded plans issued by municipal entities, plans for which
Cigna acts only as third-party administrator.
As such, summary judgment is granted to Cigna on Count III
of AASC’s Complaint.
IV.
For
the
reasons
CONCLUSION
stated
herein,
Defendant’s
Motion
for
Partial Summary Judgment [ECF No. 89] is granted.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: June 13, 2017
- 26 -
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