Third Circuit Revives ERISA Recovery and Fiduciary-Breach Claims Tied to Cigna’s MRC-1 Out-of-Network Reimbursements

In Advanced Gynecology & Laparoscopy of North Jersey P.C. v. Cigna Health & Life Insurance Co., No. 24-2212, 2026 WL 2030368 (3d Cir. July 13, 2026), nearly two dozen New Jersey healthcare practices, providing out-of-network services to Cigna subscribers who had assigned their plan benefits, alleged that Cigna systematically underpaid them for thousands of elective and emergency claims in violation of the terms of Cigna’s ERISA plans. The District Court for the District of New Jersey dismissed the third amended complaint with prejudice, and the practices appealed the dismissal of their ERISA benefit-recovery, ERISA fiduciary-duty, and RICO claims, as well as the earlier dismissal with prejudice of their state-law quantum meruit and New Jersey HCAPPA claims. The Third Circuit affirmed in part, vacated in part, and remanded.

The plans calculated out-of-network reimbursement by reference to a Maximum Reimbursable Charge determined under one of two methods. Under the MRC-1 method, reimbursement equaled the lesser of the provider’s normal charge or a policyholder-selected percentile of area charges compiled in a Cigna-selected database, which the practices alleged was the FAIR Health database set between the 80th and 100th percentiles. The practices alleged that they set their normal charges at roughly the 80th percentile of that database, so the MRC-1 method should have yielded reimbursement near their normal charges, yet MRC-1 reimbursements averaged just 15.2% of those charges. The District Court had concluded that the practices failed to plausibly allege their normal charges, reasoning that figures labeled “normal” on a spreadsheet had earlier been labeled “incurred,” that the numbers therefore reflected billed rather than normal charges, and that unexplained variations in charges for identical billing codes undermined the pleading.

The Third Circuit disagreed. Accepting the allegations as true and drawing all inferences in the practices’ favor at the pleading stage, the court held that the allegation that the practices billed their normal charges, set at the 80th percentile of the FAIR Health database, sufficed to establish their normal charges for the MRC-1 method, and that the cited discrepancies involved only eight of the 1,677 claims at issue and did not require dismissal. Because the practices alleged reimbursement below the 80th percentile, they stated an ERISA claim under 29 U.S.C. § 1132(a)(1)(B) as to the MRC-1 plans. The court accordingly vacated the dismissal of the benefit-recovery claim as to the MRC-1 plans.

The court reached the opposite conclusion on the MRC-2 and emergency-services theories. Under the MRC-2 method, reimbursement could be calculated under a first approach tied to a Medicare-based schedule or a second approach tied to the 80th percentile of a Cigna-selected database. The practices alleged that Cigna never created the schedule contemplated by the first approach, but they did not allege that Cigna failed to reimburse them as permitted by the equally valid second approach, and the court held that this omission was fatal to the MRC-2 claim. As to emergency services, the plan language set the allowable amount as the negotiated amount agreed to by the provider and Cigna, or, absent a negotiated amount, the greatest of three alternative calculations. Because the practices did not allege the absence of negotiated amounts, and a negotiated amount would prevail over the MRC value, they failed to allege entitlement to reimbursement at their normal charges for emergency services. The court affirmed the dismissal of the benefit-recovery claim as to the MRC-2 plans and the emergency-services reimbursements.

On the fiduciary-duty claims, the court distinguished between two theories. Applying Thole v. U.S. Bank N.A., 590 U.S. 538 (2020), and Knudsen v. MetLife Group, Inc., 117 F.4th 570 (3d Cir. 2024), the court held that the practices lacked Article III standing to pursue fiduciary claims premised on Cigna’s cost-containment fees and its use of plan funds, because they did not allege an individual right to those monies and thus alleged no concrete injury, regardless of the relief sought. The court reached a different result on the theory that Cigna breached its fiduciary duties by fraudulently misrepresenting that the practices were not entitled to the full value of claims accepted by the plans. That theory rested on non-speculative allegations of financial harm, giving the practices standing to seek equitable relief, and because the District Court had dismissed it on the same normal-charges ground the Third Circuit rejected, the court vacated that dismissal. On remand, the District Court was directed to consider in the first instance whether the practices, as assignees, have standing to bring a fiduciary-duty claim under 29 U.S.C. § 1132(a)(3).

The court vacated the dismissal of the RICO claims, which the District Court had dismissed solely for want of an adequately pleaded underpayment injury, incorporating its ERISA analysis. Finally, the court affirmed the dismissal of the state-law claims. It held the quantum meruit claim preempted under 29 U.S.C. § 1144(a) because the practices’ expectation of compensation was premised at least in part on the existence of the ERISA plans, and it declined to recognize an implied private right of action under New Jersey’s HCAPPA, predicting that the New Jersey Supreme Court would not infer one given the statute’s detailed binding-arbitration mechanism and the absence of discernable legislative intent to authorize private litigation. The court affirmed in part, vacated in part, and remanded for further proceedings.