In a dispute over reimbursements for COVID-19 testing and related services, a district court concluded that the coverage mandates of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) did not create a private right of action (Murphy Med. Assocs., LLC. v. Cigna Health & Life Ins. Co., (D. Conn. Mar. 11, 2022)). The court therefore dismissed claims by health providers alleging that a health plan's insurer violated the FFCRA and Cares Act by failing to reimburse the providers for COVID-19-related testing services furnished to plan participants. However, the court permitted the providers' related ERISA benefit claims to proceed.

For more information on the COVID-19 testing coverage mandates, see Practice Notes:

As background, the FFCRA requires group health plans and health insurers offering group coverage to provide benefits for certain items and services related to testing for the detection of SARS-CoV-2 (the virus that causes COVID-19) or diagnosing COVID-19 during the ongoing public health emergency (PHE). The FFCRA requires plans and insurers to provide this coverage without cost-sharing (that is, deductibles, copayments, and coinsurance), preauthorization, or other medical management requirements. The CARES Act amended the FFCRA to expand the diagnostic items and services that plans and insurers must cover without cost-sharing, preauthorization, or medical management (see Practice Notes, COVID-19 Compliance for Health and Welfare Plans and COVID-19 Vaccine and Testing Requirements for Group Health Plans).

The plaintiff-providers in this case operated COVID-19 testing sites in parts of Connecticut and New York—offering services that included antibody blood testing for individuals who believed they had recovered from COVID-19 and telemedicine counseling. The providers sued the health insurer for violations of the FFCRA, CARES Act, and ERISA, alleging that the insurer:

The insurer moved to dismiss.

Dismissing the providers' claims under the FFCRA and CARES Act, the district court held that the coverage mandates under these statutes did not create a private right of action. The court rejected the providers' arguments that:

According to the court, nothing in the text of the FFCRA or CARES Act indicated that Congress intended to create a private right of action for providers, and the court could not create one absent congressional intent.

However, the court did not dismiss the providers' related ERISA benefit claims, reasoning that the providers' allegations were sufficient at this stage of the litigation (see Practice Note, ERISA Litigation: Causes of Action and Remedies Under ERISA Section 502 for Benefit and Fiduciary Breach Claims: Claims for Benefits Under Plan Terms (ERISA Section 502(a)(1)(B))). Among other arguments, the insurer asserted that the ERISA benefit claims should be dismissed because the providers failed to identify the participants whose benefits they sought to recover or the plans involved. The court acknowledged that claims may be dismissed where a plaintiff fails to identify the plan at issue or the plan language violated. In this case, however, the court reasoned that the reimbursement obligation derived from the FFCRA and the CARES Act, which essentially modified the terms of ERISA plans to provide SARS-CoV-2 tests at no cost to individuals. Accordingly, the relevant plans could not have barred the insurer's obligation to reimburse COVID- 19 diagnostic testing consistent with federal law.

The court also rejected the insurer's argument that the providers' ERISA benefit claims should be dismissed for failure to exhaust administrative remedies (see Practice Note, ERISA Litigation: Exhaustion of Plan Claims Procedures). In doing so, the court noted the providers' assertion that the insurer had reflexively and without "legitimate justification" denied thousands of claims involving the same services that were reimbursable. The court concluded that it was at least plausible—given the insurer's automatic denials in such a large scale—for the providers to have concluded that it was futile to administratively exhaust each individual claim (see Practice Note, ERISA Litigation: Exhaustion of Plan Claims Procedures: Futility Exception).

In another claim, the providers sought reformation of the ERISA health plans at issue to make them compliant with the FFCRA and CARES Act. The providers asserted that many covered participants who received COVID-19 testing services had executed assignment of benefits to the providers. Rejecting this argument, the court reasoned that these assignments addressed only the participants' rights and claims to medical benefits, and did not give the providers standing to equitably reform the disputed ERISA plans. The court also disagreed with the providers' argument that they had standing to reform because Congress effectively assigned the right to payment to providers through the CARES Act. Even if the CARES Act effectively assigned this right to providers, the court reasoned that the right would be limited to seeking payment for services provided.

There is some disagreement in the courts regarding whether the FFCRA and the CARES Act include a private right of action under which COVID-19 testing providers may seek reimbursements consistent with these statutes. But providers have had better luck—at least in the early procedural litigation stages—in asserting ERISA benefit claims for COVID-19 testing services on behalf of covered participants. In addition to advancing in the federal courts, these reimbursement claims would seem to be of interest to the tri-agencies in enforcing the FFCRA and CARES Act COVID-19 testing coverage requirements.