Cigna HealthCare Sued for Denying Coverage for Liver Transplant

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December 29, 2008 Monday 04:42 PM EST

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Cigna HealthCare Sued for Denying Coverage for Liver Transplant

Fran Lysiak

LOS ANGELES

The parents of a 17-year-old girl who battled leukemia are suing Cigna Healthcare in California state court over her death a year ago, alleging the health insurer wrongfully denied coverage for a life-saving liver transplant.

The lawsuit was filed Dec. 19 in Los Angeles Superior Court by Attorney Mark Geragos for Hilda and Grigor Sarkisyan, parents of Nataline Sarkisyan. It accuses Cigna Healthcare of California Inc. and Cigna Healthcare Inc. of "delaying, failing to pay and/or rejecting valid claims" that resulted in the wrongful death of Nataline. Both companies are units of Philadelphia-based Cigna Corp. (NYSE: CI).

Cigna initially denied coverage for the teen's transplant, saying it was "experimental." But following a public protest on Dec. 20, 2007 at its offices in California, the health insurer reversed and agreed to cover the procedure. Several hours later, Nataline died (BestWire, April 7, 2008).

Cigna said a few hours prior to her death, it "volunteered, entirely independent of any plan or coverage decision and outside of the medical review process, to pay out of its pocket not the employer's pocket for a transplant should Ms. Sarkisyan's doctors have decided to proceed.

"This decision was made despite the fact that Cigna had no obligation to do so, and despite concluding, based on the information available, that the treatment would be unproven and ineffective and therefore experimental and not covered by the employer's benefit plan," the health insurer said.

The case involved a self-insured employer, not Cigna, that pays for all clinical procedures and related care, Cigna Healthcare's chief medical officer said in a statement last year (BestWire, April 7, 2008).

According to the suit, Hilda and Grigor Sarkisyan were the beneficiaries of the Cigna Healthcare policy and Nataline was an additional insured. The policy covered "without limitation, illness of end-stage liver failure."

In November 2007, Nataline underwent a successful bone marrow transplant with her brother's bone marrow, but by early December 2007, her liver began to fail. Nataline's physicians told her parents that a liver transplant would be needed to save Nataline's life, according to the suit.

The complaint charges breach of contract, insurance bad faith, unfair business practices under California Business and Professions Code Sections 17200 and intentional infliction of emotional distress and seeks general and punitive damages.

Experimental treatments "are a complex societal issue for which there is no easy answer. Virtually no health plan public or private provides coverage for treatments that the medical community considers to be unproven or ineffective, and therefore experimental," Cigna said.

The company said it continues to work with the industry and federal government "to determine the appropriate approach to unproven and experimental treatments, and whether scarce organs should go to people who are the sickest or to people who would benefit the most."

Cigna Healthcare of California currently has a Best's Financial Strength Rating of A- (Excellent).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])

December 30, 2008