Embattled downtown medical lab company Health Diagnostic Laboratory has turned the tables on one of the nation’s largest insurers and thrown a $66 million counterpunch.
HDL filed a counterclaim on Monday against Connecticut-based Cigna, alleging the insurance giant has, for more than two years, withheld reimbursement payments to HDL for tests done for tens of thousands of Cigna members.
HDL is seeking at least $66 million in damages. The company included in its lawsuit nearly 600 pages of unpaid claims submitted to Cigna starting in 2013, ranging from less than $50 to more than $4,000 per individual patient.
In a prepared statement regarding the countersuit, HDL said it “seeks to vindicate its rights and stand up to Cigna’s repeated attempts to bully smaller, innovative health care companies and service providers out of the market.”
HDL claims that Cigna began withholding payments in 2013, when it instituted a new proof-of-payment policy that required patients to pay a portion of HDL’s lab fees before the claims and reimbursement process would begin. HDL also says that it was never instructed on how much to charge patients depending on their individual plans.
The countersuit claims that Cigna then refused to work with HDL or cover its services, while still allowing doctors to assign the laboratory’s tests to patients.
“The filing of this lawsuit is necessary because Cigna is now refusing to pay HDL, Inc. even when a physician determined that HDL, Inc.’s advanced testing was reasonable and necessary for the care of his or her patients,” HDL’s statement reads.
Cigna thereby saved money in the long run, the suit alleges, because HDL’s tests allow for the early treatment of chronic diseases that are seen as a leading driver of high medical costs across the country.
“Cigna received a benefit by the provision of these services as it was spared the cost of expensive treatment of these conditions once the disease progressed,” the suit claims. “While Cigna’s brochures and public statements purports to care about the health and well being of its members, Cigna’s principal concern is its own financial bottom line.”
HDL claims Cigna refused to allow the lab company to join its network, deciding instead to keep larger laboratory companies “with which Cigna had financially advantageous contracts,” the suit states.
That decision was made “to the detriment of the patients in particular, and healthcare in general,” the suit reads.
The counterclaim is in response to a suit that Cigna filed against HDL in October seeking $84 million in damages. It alleged a scheme by HDL that involved waiving out-of-pocket fees for patients and then billing inflated rates to the insurance company.
That initial suit came a few months after HDL’s involvement in a federal kickback investigation became public knowledge. HDL has since settled with the Department of Justice and will pay the government at least $47 million.
The unpaid claims in question were from employer-sponsored health plans administered by Cigna. HDL therefore claims that Cigna acted in violation of the federal Employment Retirement Security Act of 1974 by failing to fully the laboratory company of its reimbursement policy and making retroactive benefit claim denials.
It also alleges that the insurer further violated ERISA law when it sued HDL while still owing the firm millions.
HDL is represented in the case by Brien O’Connor, Laura Hoey, Loretta Richard, Maria Carboni and Matthew Tolve of Boston-based law firm Ropes & Gray. Michael Caldwell and Daniel Elliott of LeClairRyan are also representing HDL.
Cigna is represented in the case by James Sconzo and John Pitblado, attorneys with Connecticut-based law firm Carlton Fields Jorden Burt. They did not respond to requests for comment by press time.
This newest countersuit comes only a few weeks after another insurance giant, Aetna, filed its own case against HDL.
The laboratory company’s co-founder and former CEO Tonya Mallory may also be facing charges further down the road from the federal government.