Cigna Prevails: 6th Circuit Sides with Insurer in Tennessee Hospitals Emergency Room Billing Dispute

Emergency room visits can be financially devastating, with some patients facing unexpected bills reaching thousands of dollars. In fact, a study by Peterson-KFF found that 51% of adults worry about affording unexpected medical bills. A recent ruling in the Sixth Circuit highlights the ongoing battle between insurers and hospitals over fair compensation for emergency services, specifically regarding out-of-network care. This decision has significant implications for Tennessee hospitals and patients, potentially affecting how emergency room billing disputes are handled in the future.

The Case: AMISUB (SFH), Inc. v. Cigna Health and Life Insurance Co.

The legal battle, AMISUB (SFH), Inc., et al v. Cigna Health and Life Insurance Co., case number 23-5714, centered on a lawsuit brought by two Tennessee hospitals, Saint Francis Hospital and Saint Francis Hospital-Bartlett, against Cigna Health and Life Insurance Company. The hospitals claimed that Cigna systematically underpaid them for emergency services provided to Cigna members who sought care at their facilities. As out-of-network providers for Cigna, the hospitals argued that the insurer had a “quasi-contractual obligation” to pay the reasonable value of their services. They based this argument on federal and state laws requiring hospitals to treat emergency patients and insurers to cover emergency care.

The United States District Court for the Western District of Tennessee initially dismissed the hospitals’ claims. The hospitals then appealed to the Sixth Circuit Court of Appeals.

The Sixth Circuit’s Ruling

On July 2, 2025, the Sixth Circuit upheld the lower court’s decision, ruling in favor of Cigna. The three-judge panel stated that the hospitals could not pursue unjust enrichment and quantum meruit claims against Cigna because the insurer’s refusal to provide full coverage for out-of-network emergency services did not violate state or federal law. The court found no contractual obligation for Cigna to provide more than partial coverage for these expenses.

The Sixth Circuit clarified that neither the Affordable Care Act (ACA) nor Tennessee law imposes a duty on Cigna to pay the full value of out-of-network emergency services. The court acknowledged the ACA requires insurers to provide “coverage” for emergency services, but this doesn’t equate to paying the total cost demanded by out-of-network providers.

Key Legal Concepts at Play

Several legal concepts are central to understanding this case:

Unjust Enrichment: This legal doctrine prevents one party from unfairly benefiting at another’s expense. The hospitals argued that Cigna was unjustly enriched by not fully compensating them for the emergency services they provided to Cigna’s members.
Quantum Meruit: This is a claim for the reasonable value of services provided, even in the absence of a contract. The hospitals argued they were entitled to quantum meruit because they provided emergency services that Cigna was obligated to cover.
Balance Billing: This occurs when out-of-network providers bill patients for the difference between their charges and the amount the insurer is willing to pay. The Sixth Circuit’s ruling affirms Cigna’s right to engage in balance billing as long as it doesn’t violate state or federal law.
The No Surprises Act: While this federal law, enacted in 2022, protects patients from surprise medical bills in many situations, it doesn’t dictate the specific amount insurers must pay out-of-network providers. The act primarily focuses on ensuring patients only pay in-network cost-sharing amounts in emergency situations.

Implications for Tennessee Hospitals and Patients

This ruling has several potential implications:

Hospitals May Face Financial Pressure: With the Sixth Circuit backing Cigna’s position, Tennessee hospitals, especially those with a significant volume of emergency care, might experience increased financial strain. They may need to re-evaluate their strategies for negotiating with insurers and managing costs.
Potential for Increased Balance Billing: While the No Surprises Act offers some protection, patients could still face balance billing in certain scenarios. It’s crucial for patients to understand their rights and the limitations of their insurance coverage.
Importance of In-Network Care: The ruling underscores the importance of seeking care from in-network providers whenever possible. In-network care typically results in lower out-of-pocket costs for patients.
Further Litigation: This may not be the end of the road. Hospitals could pursue other legal avenues or lobby for changes in state or federal laws to address the issue of fair reimbursement for emergency services.

The Broader Context: Surprise Billing and the No Surprises Act

The dispute between Cigna and the Tennessee hospitals is part of a larger national debate surrounding surprise billing and the appropriate level of reimbursement for out-of-network care. The No Surprises Act, which went into effect in 2022, was intended to shield patients from unexpected medical bills.

Key provisions of the No Surprises Act include:

Emergency Services: If you have an emergency medical condition and get emergency services from an out-of-network provider or facility, the most the provider or facility may bill you is your plan’s in-network cost-sharing amount (such as copayments and coinsurance). You can’t be balance billed for these emergency services.
In-Network Facilities: When you get services from an in-network hospital or ambulatory surgical center, certain providers there may be out-of-network. In these cases, the most those providers may bill you is your plan’s in-network cost-sharing amount. This applies to emergency medicine, anesthesia, pathology, radiology, laboratory, neonatology, assistant surgeon, hospitalist, or intensivist services.
Balance Billing Restrictions: Out-of-network providers cannot balance bill you in these situations unless you give written consent and give up your protections.

Despite the No Surprises Act, disputes between insurers and providers persist, particularly concerning the “reasonable” reimbursement rate for out-of-network services. This Cigna case highlights the complexities of these ongoing negotiations.

What Can You Do?

Navigating the complexities of healthcare billing can be daunting. Here’s some advice:

Know Your Insurance Coverage: Understand the details of your health insurance plan, including in-network and out-of-network benefits, copays, deductibles, and coinsurance.
Seek In-Network Care: Whenever possible, choose providers and facilities within your insurance network.
Ask Questions Upfront: Before receiving treatment, ask about the costs involved. If you’re unsure whether a provider is in your network, confirm with your insurance company.
Review Your Bills Carefully: Scrutinize medical bills for errors or discrepancies.
Appeal Denials: If your insurance claim is denied, file an appeal with your insurance company. Cigna Healthcare provides an appeals process for resolving contractual disputes regarding post-service payment denials and payment disputes. You generally have 180 days from the date of the initial payment or denial notice to submit an appeal.
Contact Customer Service: Before beginning the appeals process, call Cigna Healthcare Customer Service at 1(800) 88Cigna (882-4462) to try to resolve the issue.
Seek Legal Advice: If you’re facing significant medical debt or believe you’ve been unfairly billed, consult with a qualified healthcare attorney to explore your legal options.

Conclusion

The Sixth Circuit’s decision in AMISUB v. Cigna is a significant victory for the insurer, affirming its right to limit coverage for out-of-network emergency services in Tennessee. While the ruling may put financial pressure on hospitals, it also underscores the importance of patients understanding their insurance coverage and seeking in-network care whenever possible. As the debate over fair reimbursement for emergency services continues, it’s crucial for patients to stay informed and advocate for their rights.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. You should consult with a qualified attorney to discuss your specific situation.