UPDATE: D CEO Healthcare has received a statement from Cigna, which is included below.
Several local physicians say that an error in Cigna’s fee schedule shortchanged their practices by thousands of dollar and has yet to be repaid more than a year later.
Leaders at Patient Physician Network, a clinically integrated independent physicians association (IPA), have been attempting to recoup the reimbursements. They say Cigna has owed its practices for more than a year in some cases and has been slow to respond to the issue. PPN has about 250 member practices representing nearly 700 physicians, mainly in North Texas. These members are independent practices that receive support and negotiating leverage through the IPA.
PPN President and CEO Scott Hurst says that the Cigna fee schedule system was corrupted in November 2022 when the language was flipped, resulting in practices being paid less than half what they should have been for certain procedures and services. Even though it happened to multiple PPN practices, the group consolidated their complaints, sending spreadsheets with the underpaid claims to Cigna. PPN made a single appeal to Cigna to rectify the problem, thinking the insurer would fix it in 90 days.
Hurst says Cigna eventually responded that they were working on the problem to fix the code and fee schedule. However, with thousands of claims made under the corrupted code, the problem has yet to be fixed for many practices. Hurst says the claims were being correctly coded by February 2023, but tens of thousands of dollars worth of claims from the period when the fee schedule was malfunctioning have yet to be reimbursed.
“I guarantee that if the insurance company would have overpaid us, Cigna would have pulled that money back a lot faster than a year,” Hurst says.
Hurst has remained in contact with Cigna to bring attention to the problem, but PPN practices ranging from OBGYNs and pediatricians to dermatologists and internists are tens of thousands of dollars in the hole because of the error. Hurst says the problem has been particularly acute in McKinney because the City of McKinney uses Cigna as its health insurance provider.
While a reimbursement issue of this size may not impact larger groups or hospitals, it can be a massive headache for a smaller independent practice. “It is a serious chunk out of the operating margin,” Hurst says. “It is frustrating to have one person work on this for nine months. If you are a small practice, this makes a difference.”
Independent physicians face uphill battles in the best of circumstances. With tighter margins than larger groups or consolidated practices within a health system or private equity, it can be challenging to remain independent. According to the American Medical Association, between 2012 and 2022, the number of self-employed physicians dropped by 9 percent, while the share of employed physicians during that period grew from 41.8 percent to 49.7 percent. With less negotiating leverage and proportionally larger overhead, independent practices struggle to compete with massive insurers or health system physician groups. Numerous studies show that provider consolidation increases costs for payers but can provide stability for employed physicians and a big payout for physician owners. When there is a fee schedule malfunction, it adds to the pressure already felt by independent practices in the best of circumstances.
Emails obtained by D CEO Healthcare between providers and Cigna representatives show that Cigna has, at times, responded that it is working on the problem. “Cigna is actively auditing and adjusting the claims impacted as quickly as possible. No action is necessary on the part of PPN’s participating providers. Any applicable late payment interest will be included with the claim adjustments,” one email read.
A statement from Cigna read, “We have been working diligently to resolve the system error that affected so me of our valued local physicians. Reimbursements began last year and we anticipate that the corrected payments will be completed in the coming weeks. We understand how frustrating billing issues can be and appreciate physicians’ partnership as we work to improve the health and vitality of the community we serve.”
But as the months passed, emails between providers, PPN, and Cigna showed growing frustration with the lack of attention paid to the underpaid claims with rare responses and no action. “Your team is deliberately stalling the process to avoid paying out our rightfully earned income. We demand these claims be processed by the end of the month,” one email from a PPN practice reads. “We will not stand by with your non-answers with zero commitments or timelines for resolution.”
In April 2024, nearly a year and a half after the fee schedule problem first occurred, Hurst is still trying to get the attention of Cigna representatives and recoup payments for PPN practices. “This unacceptable situation continues to be unacceptable, now 14-17 months later,” he wrote to Cigna this month. “Is there anyone at Cigna who wants to resolve this?”
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