Pacific Recovery Solutions v. Cigna Behavioral Health, Inc.

Background

This case is one of three related cases involving allegations that a Cigna entity failed to reimburse mental-health providers at usual, customary, and reasonable rates. Cigna Behavioral Health, Inc. moved under Federal Rule of Civil Procedure 42(a) to consolidate this case with Summit Estate, Inc. v. Cigna Health and Life Insurance Co., No. 20cv4697 EJD. The plaintiffs opposed the motion. The court decided the motion without oral argument.

The Pacific Recovery plaintiffs are four out-of-network behavioral-health providers that provide intensive outpatient treatment. They allege that Cigna represented during benefit-verification calls that claims would be paid using usual, customary, and reasonable rates. They allege that Cigna instead used Viant, a third-party repricing company, to negotiate lower payments. The plaintiffs assert claims involving unfair business practices, misrepresentation, conspiracy, breach of contract, promissory estoppel, the Racketeer Influenced and Corrupt Organizations Act, and the Sherman Act. They seek to represent a class of similarly situated providers.

The Summit case is an individual action involving one provider, ten patients, and claims mainly concerning residential and partial-hospitalization treatment. It also involves a different Cigna-affiliated defendant and does not name Viant. Summit’s claims concern treatment provided between September 2014 and August 2017. The Pacific Recovery complaint did not define a class period and concerns at least sixty patients and intensive outpatient treatment. The Summit case had also progressed through an earlier lawsuit, settlement discussions, discovery, mediation, and prior motions to dismiss, while Pacific Recovery faced separate motions to dismiss.

Legal standard

Rule 42(a) permits a court to consolidate cases that involve common questions of law or fact. The court has broad discretion, but the party seeking consolidation must show that it would be desirable. The court must weigh the time and effort consolidation could save against the inconvenience, delay, and expense it could cause.

Court’s analysis

The court found one common issue: whether Cigna failed to follow an agreement to pay usual, customary, and reasonable rates. That common issue did not require consolidation. The court emphasized that the cases involve different provider plaintiffs, patients, defendants, treatments, time periods, and legal claims. Pacific Recovery also includes broader claims against Viant that are not present in Summit. These differences could make Pacific Recovery more expansive, expensive, and time-consuming than Summit and could broaden discovery and motion practice.

The court also found that the cases’ different stages weighed against consolidation. Summit had progressed farther, while Pacific Recovery was subject to separate motions to dismiss. Consolidation could therefore cause delay, expense, and inconvenience to the plaintiff in Summit.

The court acknowledged a possible risk of inconsistent judgments, particularly concerning the Summit entities’ intensive-outpatient reimbursement claims. It concluded, however, that those claims represented only a small part of the claims in both cases and that Summit’s mainly residential and partial-hospitalization claims could raise different factual issues. Consolidating the cases for all purposes therefore was not appropriate.

Disposition

The court concluded that the Cigna entities had not shown that consolidation would promote the efficient and economical resolution of the cases. The motion to consolidate Summit and Pacific Recovery for all purposes was DENIED. The order did not rule on the merits of the providers’ reimbursement or other claims.