Health Law Daily Wrap Up, BILLING AND CODING—D. Conn.: Providers cannot bring unjust enrichment claims against insurance companies based on services rendered, (May 19, 2025)

By Jeffrey H. Brochin, J.D.

The insurance company derives no benefit from those services, and deriving benefit is a prerequisite to an unjust enrichment claim.

A federal district court in Connecticut has granted the motion to dismiss filed by Cigna Health and Life Insurance Company in a lawsuit brought by Healthcare Justice Coalition DE Corp. (HJC), the assignee of provider claims asserted by an emergency physician group. HJC alleged violations of the Connecticut Unfair Trade Practices Act (CUTPA), premised on violations of the Connecticut Unfair Insurance Practices Act (CUIPA) and the Connecticut Surprise Billing Law (SBL); and for unjust enrichment, quantum meruit, and declaratory relief, all of which arose out of Cigna’s alleged failure to pay for emergency medical services rendered to Cigna members by providers. Although ERISA did not preempt the various state claims, the court nevertheless found that the amended complaint failed to plausibly state a claim for relief under the state statutes due to a lack of benefit having inured to Cigna which was not paid for (Healthcare Justice Coalition DE Corp. v. Cigna Health and Life Insurance Co., No. 3:23-cv-01689 (KAD) (D. Conn. May. 15, 2025)).

Assignment of unpaid claims. HJC is a debt collector, and specifically, it acquires rights to pursue unpaid or underpaid insurance claims from health care providers. Once it obtains reimbursement rights from emergency medicine practice groups, it then seeks to collect on those rights from insurance companies such as Cigna. HJC purchased reimbursement claims from the emergency physician group and filed suit to collect on those claims. HJC’s assignee did not have a contract with Cigna during the period covered by the complaint, and some of group’s patients had insurance through Cigna, but the emergency medical services were out-of-network. Even so, Cigna was obligated to pay the group under the terms of Connecticut’s SBL. Cigna moved to dismiss, which for the reasons cited below, was granted.

ERISA preemption. Cigna initially argued that HJC’s claims were barred by preemption under the Employee Retirement Income Security Act of 1974 (ERISA). The court noted that ERISA sets minimum standards for plan administration and fiduciary duties, and it broadly preempts state laws that “relate to” such plans in order to ensure uniform national regulation. A state law relates to an ERISA plan if it has a connection with or reference to such a plan, and a law refers to ERISA if it “acts immediately and exclusively upon ERISA plans or where the existence of ERISA plans is essential to the law’s operation.” Notably, ERISA preemption is often found not to apply.

Here, the court found that none of the state laws at issue acted exclusively on ERISA plans or required ERISA plans to operate in any particular manner. Both CUTPA and the state common law claims were deemed to reach a much broader scope of conduct than the administration of ERISA plans. Furthermore, CUIPA and the SBL, although applicable to insurance generally, were not limited to situations involving ERISA plans. Accordingly, the court rejected Cigna’s assertion that the claims were preempted by ERISA.

Unjust enrichment claims. The court next turned to HJC’s unjust enrichment claims and observed that a party seeking recovery for unjust enrichment must prove (1) that the insurance company benefited, (2) that they unjustly did not pay for the benefits, and (3) that the failure of payment was to HJC’s detriment. HJC argued that they indeed conferred a benefit upon Cigna by treating Cigna’s members (patients), and that Cigna failed to pay for those benefits. The court framed the dispositive question as whether the amended complaint plausibly alleged that Cigna received a benefit from physician group and concluded it did not.

Referencing both in-district and several out-of-district decisions, the court noted that each of those cases held that health care providers cannot bring unjust enrichment claims against insurance companies based on services rendered to insureds. The rationale for such a conclusion is because it is counterintuitive to say that services provided to an insured are also provided to its insurer: the insurance company derives no benefit from those services, rather, what the insurance company gets is a ripened obligation to pay money to the insured—which hardly can be called a benefit. Accordingly, the court dismissed the unjust enrichment claim.

Quantum meruit. The quantum meruit remedy is available to a party where an implied contract for services existed between the parties. Therefore, the provider of services is entitled to the reasonable value of the services rendered. However, the pleadings must allege facts to support the theory that, Cigna, by knowingly accepting the services of the emergency medical physicians and representing that they would be compensated in the future, impliedly promised to pay for the rendered services. Quantum meruit is an “allied doctrine” to unjust enrichment, and in fact usually relates to the benefit of work, labor or services received by the party who was unjustly enriched. However, as with unjust enrichment, such a claim hinges on the question of whether any benefit was conferred upon Cigna at all. Here, the same requisite element, benefit, that the court already concluded HJC failed to plead in the unjust enrichment context, was also absent in the quantum meruit claim. Accordingly, the claim sounding in quantum meruit was also dismissed.

CUTPA, CUIPA, and SBL. HJC also alleged that Cigna violated CUTPA via its violations of CUIPA and the SBL. A private party seeking redress for a violation of CUIPA may allege that the practices defined by CUIPA constitute actionable CUTPA violations. But as regards to the SBL, the Connecticut Supreme Court has held that an SBL violation cannot serve as a CUTPA predicate. Therefore, the court found that Cigna was correct that if HJC’s CUIPA allegations failed, it could not fall back on alleged SBL violations to save its CUTPA claim.

Here, the court found that the complaint contained no allegations about Cigna’s “standards for prompt investigation” or whether its refusal to pay was based on “reasonable investigation,” elements recited in the relevant statutes. The mere allegation that Cigna used computers to pay out claims at specific rates said absolutely nothing about whether or how Cigna investigated the claims it was asked to pay. In addition, HJC offered only the bare assertion that Cigna owed it money for treating emergency room patients and did not pay up, none of which plausibly asserted claims under those statutes.

Based on the foregoing, the court granted Cigna’s motion to dismiss the complaint with prejudice.

The case is No. 3:23-cv-01689 (KAD).

Judge: Dooley, K.

Attorneys: Eric D. Chan (Athene Law, LLP) for Healthcare Justice Coalition DE Corp. Edward T. Kang (Alston & Bird LLP) for Cigna Health and Life Insurance Co. and Cigna Healthcare of Connecticut, Inc.

Companies: Healthcare Justice Coalition DE Corp.; Cigna Health and Life Insurance Co.; Cigna Healthcare of Connecticut, Inc.

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