Bristol Sl Holdings, Inc. v. Cigna Health & Life Insurance

I. INTRODUCTION

At issue is a dispute between a healthcare treatment center (Sure Haven, and Bristol as its assignee) and an insurance company (Cigna) over approximately $8.6 million worth of services that Sure Haven provided to Cigna’s insureds. The crux of the disagreement is whether Sure Haven entered into an enforceable agreement with Cigna to treat patients covered by Cigna through a series of “verification” and “authorization” phone calls that Sure Haven claims it relied on in providing the medical services.

II. BACKGROUND

A. Factual Background

Sure Haven was an accredited mental-health and substance-abuse treatment center that regularly serviced patients insured by Cigna. According to Bristol, Sure Haven went out of business and was forced into bankruptcy when Cigna abruptly stopped reimbursing for services provided, ultimately refusing to pay Sure Haven for services it rendered to 106 Cigna-insured patients. Bristol became the successor-in-interest to Sure Haven through a bankruptcy proceeding.

Sure Haven was an out-of-network provider for Cigna, which meant that the two parties did not have a standing contract governing medical rates and coverage. Sure Haven would…