A lawsuit filed August 19, 2026 in the US District Court for the Central District of California puts that gap at roughly 84 cents on the dollar.
Ten out-of-network substance use disorder treatment centers and clinical laboratories operating in California allege that Cigna paid them about 16% of their covered charges. The providers are seeking the balance. No defendant has responded and no court has ruled on any of the claims.
What the Complaint Alleges
The claims cover 83 patients treated between March 1, 2022 and March 15, 2026, according to reporting from Insurance Business.
The filing states that Cigna paid each provider somewhere between 0% and 28.29% of covered charges, and that as a group they received 16.42%, or about $2.5 million against aggregate covered charges of roughly $15.3 million. The complaint puts the balance it says is still owed at about $12.8 million.
Defendants named include Cigna Corporation, Cigna Health and Life Insurance Company, Cigna Healthcare of California, Connecticut General Life Insurance Company, Evernorth Behavioral Health and Cigna Health Management.
The Dispute Comes Down to Pricing Method
At issue is how those payment amounts were calculated. The complaint says the plans involved used one of two methods Cigna brands Maximum Reimbursable Charge.
One sets payment against a percentile of charges by comparable providers in the area. The other, which the filing says Cigna describes as a Medicare-like rate, sets payment against a schedule built on a Medicare-style methodology.
The providers allege the second route was never actually available to them, because during the relevant period Medicare had no rates for the services that substance use disorder facilities provide.
The complaint argues that without a Medicare rate there is no Medicare-like schedule to work from, and that Cigna’s own published disclaimer says the fallback in that situation is the provider’s normal charge or an 80th percentile of billed charges.
What happened instead, according to the filing, was a code cross-walk. It alleges detox and residential treatment were matched to codes used by inpatient psychiatric hospitals, while partial hospitalization, intensive outpatient and outpatient care were matched to codes used by skilled nursing facilities and behavioral health counselors.
Why the Fee Structure Matters
The part with the widest implications is how the money moves. On self-funded employer plans, the complaint alleges Cigna is paid a per-member, per-month fee plus a cost containment fee generally calculated as 27% to 29% of the difference between what a provider billed and what Cigna paid.
The filing alleges claims were then routed to a third-party repricer that received 9% to 12% of that same difference. The plaintiffs argue those fees track the size of the reduction rather than the accuracy of the price.
The complaint alleges Cigna’s fee for reducing the bills was nearly double what it paid the providers for delivering the treatment. These are the plaintiffs’ characterizations, not findings of fact.
The complaint also cites a March 2024 order in earlier litigation involving the same lead plaintiff, in which the court said the percentage structure warranted a degree of skepticism because it could create an incentive to under-reimburse. That finding was made in a different case.
The Parity Claim
Separately, the complaint alleges the reimbursement approach violated the Mental Health Parity and Addiction Equity Act by treating out-of-network substance use disorder providers differently from medical and surgical providers.
Parity law is the mechanism that is supposed to stop addiction and mental health treatment from being covered on worse terms than physical health care.
The filing pleads four causes of action, including a claim for plan benefits under ERISA, breach of written contract, breach of oral contract, and promissory estoppel. The plaintiffs have demanded a jury trial.
What This Means for Treatment Seekers
If you are considering an out-of-network program, the reimbursement rate your plan actually applies matters more than the fact that it covers addiction treatment at all. A low payment to the facility can turn into a balance bill that reaches you.
Ask two questions before admission: what specific rate will my plan pay for this level of care, and will you bill me for any difference. Get the answer in writing from both the plan and the program.
Exploring Treatment Options
Practical steps while this case moves through court:
Rehab.com’s directory lists verified treatment centers with insurance and payment details so you can compare programs before you commit. Call
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to speak with a treatment specialist today.
