Covid Case Q: Who Ripped Off Whom?

A pandemic ​“profiteer” — or was it a pandemic hero? — sought justice Wednesday from the greed of cold-hearted faceless insurers … or were they his victims?

Judge Janet Bond Arterton will have to sort all that out after hearing arguments Wednesday involving the latest adventures of Dr. Steven Murphy.

The question at hand: Should doctors — even those criticized as pandemic hustlers — be allowed to sue insurance companies that balk at reimbursing them for the alleged costs of Covid tests?

Arterton heard oral arguments about that question Wednesday morning in a ground-floor courtroom at the federal courthouse at 141 Church St.

The case in question is Murphy Medical Associates LLC v. Cigna Health and Life Insurance Company. It dates back to November 2020. 

At stake is whether or not the insurance giant Cigna should have to pay Murphy’s company over $4 million in reimbursements for Covid-19 tests his medical practice performed on thousands of patients across Connecticut and New York in the early months of the pandemic, including in New Haven.

Also up for debate is whether or not healthcare providers like Murphy should be legally permitted to take insurance companies to court under a section of the federal CARES Act that requires insurers to reimburse providers for the costs of Covid tests — but then doesn’t explicitly state whether or not those providers have a ​“private right of action” if the insurers don’t cough up the dough. A recent Texas federal court decision in a similar Covid-test-provider-vs.-insurer lawsuit seems to point in Murphy’s favor on that question.

Murphy is a Greenwich-based doctor who partnered with the Elicker Administration to run walk-up Covid test clinics across the city from April to October 2020. In this lawsuit and in multiple interviews with the Independent over the past two years, he has painted himself as a scrappy, innovative medical underdog who stepped up in a time of crisis to provide comprehensive Covid testing services at no out-of-pocket costs to patients, regardless of whether or not they had insurance.

Cigna, in turn, has lambasted Murphy as a pandemic ​“profiteer” who has charged upwards of $1,500 and $2,000 a pop for potentially unnecessary and unrelated tests that went well beyond checking for Covid-19. A Cigna internal investigation found a host of problems with Murphy’s billing practices, including ​“unnecessary testing for multiple respiratory pathogens (instead of testing only for COVID-19).” 

(Cigna has also used its court filings to cast doubt on Murphy’s medical credibility through, for example, footnotes like this one included in an August 2021 reply memorandum: ​“An indicator of Dr. Murphy’s view of the practice of medicine can be found on his LinkedIn profile, which states that he has been, for the last six-plus years, Medical Director for ​‘HungoverMD,’ which he describes as ​‘a Physician Led Social Health Venture, for the Busy professional who has a demanding work schedule and equally rigorous social life. Our Hangover Fixer Elixir is an effective, specialized hangover treatment delivered on demand at your location by our licensed medical professionals.‘”)

Patients across Connecticut and New York have also spoken up over the past two years about how they visited government-backed testing sites run by Murphy to receive only a Covid-19 test — and later found out that Murphy had billed their insurance companies $2,000 or more for a suite of unrequested and potentially unrelated medical treatment. Some of those patients have also been hounded by debt collectors looking to dunn them hundreds of dollars related to the Murphy’s allegedly ​“free” Covid tests.

Federal Law Q: Can Doctors Sue For Covid Test Reimbursements?

Those substantive arguments in the case took a backseat in court on Wednesday. Those arguments focus on whether Murphy is a medical fraudster seeking to pull the wool over the eyes of an unsuspecting insurance company, or whether Cigna is a greedy withholding corporate goliath looking to crush a heroic doctor who just wanted to do right by his patients during an unprecedented public health emergency — took a backseat in court on Wednesday. 

Instead, Murphy’s attorney John Martin and Cigna’s attorney Patrick Begos spent an hour and a half arguing over whether or not Judge Arterton should throw out the case entirely. 

The legal filing up for debate Wednesday was Cigna’s April 16, 2021 motion to dismiss the case, in which the insurance company dove deep into federal healthcare law to make the case that Murphy should not be allowed to move ahead with such a lawsuit. (Click here and here to read Cigna’s motion to dismiss, and here to read Murphy’s response.)

One of the central planks of Cigna’s argument is that healthcare providers like Murphy do not have a ​“private right of action” under two related pandemic-era federal laws — the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) Act.

That is, even though the CARES Act explicitly requires insurance companies to reimburse healthcare providers for the cost of Covid tests, and even though that same law details how to calculate the amounts of those insurer-to-provider reimbursements, the law does not explicitly state that a healthcare provider can sue an insurance company if the latter doesn’t pay up.

Arterton began Wednesday’s hearing by citing a Jan. 18 decision by a federal district court judge in Texas. That court that found that healthcare providers do have an ​“implied private right of action” under the FFCRA and CARES Act when looking to pressure insurance companies to reimburse them for the costs of Covid tests. 

That recent Texas federal court decision is perhaps the first ever to weigh in on this pandemic-specific legal quandary, Arterton said. And, she continued, the judge in that ruled in favor of the healthcare provider and against the insurance companies. (Click here to read Murphy’s lawyers’ take on why that decision supports their lawsuit in Connecticut.)

So, she asked Cigna’s attorney Wednesday, why should she rule that Murphy does not have a legal right to sue when her Texas federal judicial colleague so recently found that healthcare providers like him do have that right?

Begos argued that the Texas judge got it wrong. That is, the judge’s decision is ​“based on some faulty assertions” about what the federal legislations seeks to accomplish.

The FFCRA says that three federal agencies — Health and Human Services, the Department of Labor, and the Department of the Treasury — have the authority to enforce the coverage provisions of that law, he said.

“There is perfectly effective administrative remedy” — outside of the courts — that is available to healthcare providers looking to get paid by insurance companies for unreimbursed Covid tests.

Begos also argued that the novel coronavirus legislation, first passed in late March 2020 at the start of the pandemic, was intended to address ​“national security, economic, and health issues from the pandemic.” The law was not passed with the explicit intent of primarily benefiting healthcare providers directly.

And taking umbrage with some of the federal case law cited in the Texas decision, Begos said that a ​“mandatory payment provision does not necessarily create a private right of action.” That is: just because a law says that an insurance company has to pay providers for Covid tests, doesn’t mean those providers necessarily get to sue insurance company to collect on those mandated payments.

Begos repeatedly turned to a 2001 U.S. Supreme Court decision in the case Alexander v. Sandoval, in which the top federal court ruled that a private right of action cannot be based on policy reasons alone. Instead, a court must find in the law itself an explicit or implied justification for seeking a remedy by lawsuit.

Speaking up for Murphy, attorney Martin argued that the Texas federal court decision got it right. He urged Arterton to find that healthcare providers are allowed to sue insurance companies for mandatory Covid test reimbursements under FFCRA and CARES, and that she should therefore reject Cigna’s motion to dismiss.

The ​“bottom line” is that ​“this statute is a dead letter if private parties can’t enforce it,” he said.

He argued that Murphy is out ​“millions of dollars” because of Covid tests her performed on Cigna-covered patients that have not been reimbursed by Cigna. 

He said that the clear intent of the federal coronavirus legislation ​“was to ensure plenty of available testing” for the public without an associated economic burden. That’s why Congress explicitly mandated that insurance companies pay providers for the costs of Covid tests.

“This was one of the most terrifying parts of modern medical history,” Martin continued. He said healthcare providers like Murphy stepped up in this scary and uncertain time to provide tests to the public — and they did so on the promise from the government that they would get paid.

But what about the Sandoval decision? Arterton asked. What about the high court’s finding that ​“good policy reasons” do not necessitate, or even imply, a private right of action in and of themselves?

Well, Martin said, was this a ​“considered silence” by Congress? Or did legislators perhaps inadvertently leave out any mention of an explicit right for providers to sue?

“Congress was moving very quickly” in the early days and weeks of the pandemic, he said. ​“This was a hastily assembled statute.

The CARES Act is also a long and comprehensive piece of legislation. By not putting it in there, ​“did Congress not want a private right of action?”

Martin said the alternative to allowing healthcare providers to sue for non-reimbursed Covid tests costs is untenable. ​“Do we want to rely on the good faith of Cigna to pay these claims?”

“The statute, if it has not private right of action, is worthless,” he said.

Begos disagreed. He again pointed to the Sandoval decision, which said that Supreme Court found that ​“we have never accorded dispositive weight to context shorn of text.”

The court should not ​“infer” that Congress meant to — but forgot to spell out — a private right of action for healthcare providers doing Covid tests under these laws, he said. If they left that potential remedy out of the laws, there’s no reason to believe they did so by mistake.

Why Aren't There More Covid-Test Lawsuits By Other Doctors?

Begos also brought up that this lawsuit by Murphy against Cigna is one of a ​“vanishingly small” number of lawsuits brought by healthcare providers against insurance companies seeking unpaid reimbursements for Covid tests.

Begos said Cigna has scoured the legal landscape, looking for other examples of similar suits, given that there have likely been hundreds of millions of Covid tests performed over the past two years.

If this is a big problem — of insurance companies not reimbursing healthcare providers for Covid tests — then surely there would be hundreds of such lawsuits, right?

But that isn’t the case, Begos said. In fact, many of these lawsuits seem to have been filed by various companies associated with Murphy. (Indeed, in recent months, Murphy has filed six other Covid-test reimbursement lawsuits in federal court, in addition to the longstanding suit against Cigna. Click here, here, here, here, and here to read those lawsuits.)

Perhaps, Begos suggested, Murphy’s lawsuits have more to do with him charging $1,500 for tests that should cost around $250, and less to do with insurance companies unlawfully withholding Covid test reimbursements.

Martin countered that there is a simple reason for why there haven’t been more lawsuits filed akin to Murphy’s against Cigna.

That’s because it’s very expensive to file lawsuits against big insurance companies, he said. Not every provider can afford paying a lawyer for years to work such a case. Murphy is putting himself out on a limb, he said, on behalf of all such Covid test providers.

He also said that many agreements between healthcare providers and insurance companies explicitly prohibit lawsuits, and instead resolve disputes through arbitration.

While ​“there’s not a ton of litigation” on this issue of federally mandated Covid test reimbursements, Martin said, ​“there are a lot of disputes. There’s a lot of arbitration disputes. There’s a lot of contract disputes.”

“That’s why there’s no litigation. It’s not because payers are behaving well.”

Ultimately, he said, this is a question of ​“bad insurance practices,” and an insurance company that ​“thumbs its nose” at federal law in a way that is ​“improper” and ​“against public policy.”

“These are very difficult questions. These are very interesting questions,” Arterton said as she thanked both sides before closing Wednesday’s hearing and promising to take the matter ​“under advisement.”

See below for previous coverage of Dr. Murphy’s Covid-19 testing and billing practices in New Haven.

• After $2,774 Covid Test, Dunner Persists
• Cigna Blasts Pandemic ​“Profiteer” Doc
• Covid-Test Doc’s Woes Mount; UNH Bails
• Covid Updates: Homeless Plan Previewed; City Drops Dr. Murphy
• Debt Collector Dogs ​“Free” Covid Testee
• Covid-Free? We’ll Tell You Next Week
• We Got Swabbed In Day Street Park
• Dixwell, Fair Haven Test Sites Readied