# LIPANI, M.D. v. CIGNA HEALTH AND LIFE INSURANCE COMPANY

> District Court, D. New Jersey · June 28, 2023

URL: https://www.frixlaw.com/law-library/cases/10655814

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** June 28, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10655814

## How later opinions describe it (automated extraction)

- noting that the arbitrary-and-capricious and abuse-of-discretion standards of review are essentially identical in the ERISA context

## Opinion text

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JOHN D. LIPANI, M.D., as an assignee,
authorized representative, and attorney-in-fact
of his patient S.L.,
Plaintiff, Civil Action No. 21-16851 (GC) (TJB)
v. MEMORANDUM OPINION
CIGNA HEALTH AND LIFE INSURANCE
COMPANY,
Defendant.

CASTNER, District Judge
THIS MATTER comes before the Court upon two motions for summary judgment
pursuant to Federal Rule of Civil Procedure (“Rule”) 56: (1) Plaintiff John D. Lipani, M.D.’s,
Motion for Summary Judgment (see ECF No. 17), and (2) Defendant Cigna Health and Life
Insurance Company’s Motion for Summary Judgment (see ECF No. 15). The Court has carefully
considered the parties’ submissions, and decides the matter without oral argument pursuant to Rule
78 and Local Civil Rule 78.1. For the reasons set forth herein, and other good cause shown,
Plaintiff's motion is DENIED, and Defendant’s motion is GRANTED.

L BACKGROUND!
A. Procedural Background
This is a dispute over a denied claim for health benefits stemming from an abandoned
surgical procedure. On September 13, 2021, Dr. John D. Lipani (“Lipani”), M.D., a board-certified
specialist in brain and spine surgery who owns and operates Princeton Neurological Surgery, P.C.,
filed this action against Cigna Health and Life Insurance Company (“Cigna”), which administers
commercial health plans.? (ECF No. 1 §§ 1-4.°) Lipani brought suit as an assignee, duly-appointed
authorized representative, and attorney-in-fact of his patient, S.L.,’ for unpaid benefits pursuant to
Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (“ERISA”). □□□□
36-41.°)

On a motion for summary judgment, the Court “draw[s] all reasonable inferences from the
underlying facts in the light most favorable to the nonmoving party.” Jaffal v. Dir. Newark New
Jersey Field Off Immigr. & Customs Enf’t, 23 F.4th 275, 281 (3d Cir. 2022) (quoting Bryan v.
United States, 913 F.3d 356, 361 n.10 (3d Cir. 2019)).
2 The Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1331.
3 Page numbers for record cites (i.e., “ECF Nos.”) refer to the page numbers stamped by the
Court’s e-filing system and not the internal pagination of the parties.
4 In the Third Circuit, “a valid assignment of benefits by a plan participant or beneficiary
transfers to . . . a [health] provider both the insured’s right to payment under a plan and his [or her]
right to sue for that payment.” Am. Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield,
890 F.3d 445, 450 (3d Cir. 2018) (citing NV. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369,
372 (3d Cir. 2015)). While this transfer of rights can generally be constrained by an anti-
assignment clause in ERISA-governed health insurance plans, id. at 453, there appears to be no
challenge by Cigna to the assignment in this case.
ERISA is the landmark statute governing employee benefit plans, and Section 502 enables
participants and beneficiaries to bring civil actions for benefits under the ERISA statute. See 29
ULS.C. § 1132(a)(1)(B).
6 The paragraphs in the Complaint are misnumbered, and it jumps from paragraph 41 to 36
instead of to 42. (See ECF No. 1 at 9.)

Following discovery, Cigna moved on May 23, 2022, for summary judgment, asking the
Court to dismiss the Complaint in its entirety with prejudice. (ECF No. 15.) That same day, Lipani
also moved for summary judgment, asking the Court to order that the denied claim be reprocessed
by Cigna consistent with the terms of S.L.’s employee benefit plan. (ECF No. 17.) The parties
proceeded to file their respective oppositions and replies, and briefing was completed in August
2022.’ (ECF Nos. 24, 26, 29, 30.)
B. Undisputed Facts®
S.L. was the beneficiary of an employee welfare benefit plan known as The Prudential
Benefits Choice Fund Open Access Plus HRA 1000 (the “Plan”). (DSMF & PRSMF { 15.) Cigna
was the Plan’s “claims administrator” and “claims fiduciary.” (DSMF & PRSMF { 16; PSMF &
DRSMEF 3; ECF No. 15-10 at 11.) Health benefits under the Plan would be paid only if Cigna,
as the fiduciary, “decide[d] in its sole discretion that the claimant is entitled to them.” (DSMF &
PRSMF §§ 17-18; ECF No. 15-10 at 9.)
S.L. suffered from severe lower back pain, and after she visited Lipani for consultations,
Lipani recommended a lumbar spine fusion to help relieve the pain. (PSMF & DRSMF § 2; DSMF
& PRSMF § 2.) Such a surgery is intensive and complex, and prior to operating on S.L., Lipani
received pre-authorization for the procedure from Cigna, which approved several related CPT

7 As part of motion practice on summary judgment, the Court allowed certain documents to
be filed under seal to protect confidential health information. (See ECF No. 21.) In rendering its
decision on the motions, the Court has not referenced any such confidential health information and
detailed only what was necessary to a resolution.
8 Defendant’s Statement of Material Facts (‘DSMF”) is at ECF No. 16-1; Plaintiff's
Response to Defendant’s Statement of Material Facts (“PRSMF*”) is at ECF No. 26-1; Plaintiffs
Statement of Material Facts (“PSMEF”) is at ECF No. 17-2; and Defendant’s Response to Plaintiff's
Statement of Material Facts (“DRSMF”) is at ECF No. 25.

Codes.? (DSMF & PRSMF ff 1-5; PSMF & DRSMEF 4 2, 4; ECF No. 16-2 at 2-3.)
On December 27, 2019, the planned day of the surgery, S.L. was brought to the operating
room at 8:30 a.m. and placed under a general anesthesia. (DSMF & PRSMF {ff 6-8.) Before S.L.
was positioned on the operating table, she “exhibited significant hypotension” and the
anesthesiologist struggled to maintain S.L.’s blood pressure. (DSMF & PRSMF {ff 9-10; PSMF
& DRSMF § 7.) Because Lipani and the anesthesiologist were concerned that, under the
circumstances, spinal surgery would be risky and potentially life threatening, the surgical
procedure was canceled. (DSMF & PRSMF {ff 11-12; PSMF & DRSMF { 7.) S.L. left the
operating room at 9:37 a.m., about an hour after she had entered, and was woken up from the
anesthesia, extubated, and taken to the post-operative care unit where she was seen for further
evaluation. (DSMF & PRSMF § 13; ECF No. 16-3 at 3.) Four days later, Lipani performed the
lumbar spine fusion surgery on S.L.'° (ECF No. 16-6 at 10 (“[C]anceled procedure on 12/27/19

... was moved to 12/31/2019.”).)
On December 31, 2019, Lipani submitted a claim to Cigna with charges totaling
$558,996.00 for the services he allegedly rendered on December 27.!' (DSMF & PRSMF □ 19;

? “CPT” refers to the Current Procedures Terminology, which is a system for coding medical
services and procedures.
10 In Cigna’s Statement of Material Facts, it wrote that “[t]he surgery was successfully
performed on December 31, 2019 and Plaintiff was paid in accordance with the Plan.” (DSMF □
14.) Plaintiff denied the statement “as the documents cited do not support the statement,” writing
that “Plaintiff... lacks sufficient knowledge to determine the payment in relation to the terms of
the Plan.” (PRSMF § 14.) Because the payment for December 31 is not in dispute in this case,
what was paid and whether the surgery was successful is immaterial.
i S.L. assigned her right to submit claims for her surgery to Lipani, and she designated Lipani
as her authorized representative to pursue any cause of action that she may have under her
insurance policy and the Plan. (PSMF & DRSMF § 8.) S.L. also named Lipani as her “attorney-
in-fact.” (PSMF & DRSMF § 8.)

PSME & DRSMEF 4 9; ECF No. 16-8 at 2-3.) In the claim, Lipani billed for several CPT Codes:
$85,000.00 for 22633 (arthrodesis, combined posterior single interspace and segment; lumbar);
$130,000.00 for 22634 (arthrodesis, combined posterior each additional interspace and segment
x4); $138,000.00 for 22853 (insertion of interbody biomechanical device x3); $59,100.00 for
63047 (laminectomy, facetectomy and foraminotomy single vertebral segment; lumbar);
$34,500.00 for 63048 (laminectomy, facetectomy and foraminotomy single vertebral segment;
each additional segment); $68,562.00 for 22830 (exploration of spinal fusion); $36,879.00 for
22842 (posterior segmental instrumentation 3 to 6 vertebral segments); $3,110.00 for 20930
(morselized allograft); and $3,845.00 for 20936 (autograft for spine surgery only). (ECF No. 16-
8 at 2-3; ECF No. 16-2 at 2-3; DSMF & PRSMF { 3.)
On February 26, 2020, Cigna denied the claim on the ground that the December 27 attempt
at “surgery was aborted prior to skin incision being made” and the “[o]perative report did] not
support procedures performed as billed.” (DSMF & PRSMF § 20; PSMF & DRSMF 11; ECF
No. 16-9 at 2-6.)
On March 5, 2020, Lipani submitted a “corrected” claim with charges that totaled
$322,072.00 for the surgical services allegedly rendered on December 27.'* (DSMF & PRSMF
21; PSMF & DRSMF § 10; ECF No. 16-10 at 2-4.) On March 27, Cigna denied the corrected
claim, again on the ground that the December 27 attempt at surgery had been terminated prior to

an incision and the report from the procedure did not support payment of the services as billed.
(DSMF & PRSMF § 22; PSMF & DRSMEF § 11; ECF No. 16-11 at 2-6.)

12 Lipani’s March 5, 2020 claim included most of the same CPT Codes as were listed in the
claim submitted on December 31, 2019. (Compare ECF No. 16-8, with ECF No. 16-10.)

On April 21, 2020, Lipani appealed Cigna’s denials. (DSMF & PRSMF { 23; ECF No.
16-6 at 4-5.) Lipani highlighted that (i) he had received authorization from Cigna prior to
attempting the surgery; (ii) had appropriately submitted a “Modifier 53” with the claims for those
services that had to be prematurely canceled; and (iii) the facility and anesthesia claims for
December 27 had been paid by Cigna. (PSMF & DRSMF { 12; ECF No. 16-6 at 2-51.)
One month later, on May 20, 2020, Cigna denied the appeal and upheld its determination
that Lipani’s December 27 charges were not eligible for reimbursement. (DSMF & PRSMF 24;
PSME & DRSMF § 14.) In the denial, Cigna wrote that its “research show[ed] that [the] claim

was processed correctly and according to the terms of the member’s benefit plan provisions as well

as Cigna’s reimbursement policies.” (ECF No. 16-12 at 3.) Specifically, Cigna explained that the
billed services denied were “not supported by the documentation provided with the claim
submission” and that “services or procedures that are not clearly detailed will not be considered
for reimbursement.” (/d.)
Following the denial of the appeal, Lipani asked for an external review by an independent
organization. (DSMF & PRSMF § 25-27; ECF No. 16-13 at 2-4.) The request for an external
review was denied on July 30, 2020, because Cigna’s claim denial did not involve medical
judgment and, therefore, was ineligible under the Plan for external review. (DSMF & PRSMF {
26-30; PSMF & DRSMF § 20; ECF No. 16-15 at 2.)
After the request for external review was denied, Lipani sent S.L. a bill for $87,757.00.
(DSMF & PRSMF { 30.)

II. LEGAL STANDARD
A. Federal Rule of Civil Procedure 56: Summary Judgment
Pursuant to Rule 56, “[s}ummary judgment is proper when, viewing the evidence in the
light most favorable to the nonmoving party and drawing all inferences in favor of that party, there
is no genuine issue of material fact and the moving party is entitled to judgment as a matter of
law.” Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 402 (3d Cir. 2016) (citing Fed.
R. Civ. P. 56(a)). “A fact is material if—taken as true—it would affect the outcome of the case
under governing law.” M.S. by & through Hall v. Susquehanna Twp. Sch. Dist., 969 F.3d 120,
125 (3d Cir. 2020) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “And a
factual dispute is genuine ‘if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.’” Jd.
The standard is the same in the context of dueling motions for summary judgment. See
Auto-Owners Ins., 835 F.3d at 402. “When both parties move for summary judgment, ‘[t]he court
must rule on each party’s motion on an individual and separate basis, determining, for each side,
whether a judgment may be entered in accordance with the Rule 56 standard.’” Jd. (quoting 10A
Charles Alan Wright et al., Federal Practice & Procedure § 2720 (3d ed. 2016)).
I. DISCUSSION
A. Statute of Limitations
Relying on the provision in S.L.’s Plan that states that “[aJny suit or legal action [had to
be] initiated by . . . one year following a final decision on your claim,” Cigna initially argued that
Lipani’s Complaint should be dismissed because it was untimely filed. (ECF No. 16 at 14-16; see
also DSMF & PRSMF 4 31.) In opposition, Lipani pointed out that, among other things, Cigna’s
denial letter stated that Plaintiff could initiate suit pursuant to Section 502(a) of ERISA within

three years, which Lipani did on Plaintiffs behalf.'? (ECF No. 26 at 10-11; see also ECF No. 17-
3 at 93.) On reply, Cigna withdrew its argument that Lipani’s cause of action was untimely,
acknowledging that the denial letter referenced a three-year limitations period. (ECF No. 29 at 5.)
Accordingly, there is no dispute, and Lipani’s Complaint is deemed timely filed.
B. Standard of Review
The parties contest what standard of judicial review applies. Cigna argues that the claim
denial should be reviewed under the arbitrary-and-capricious standard because S.L.’s Plan gave
Cigna discretionary authority. (ECF No. 16 at 16-17 (citing Fleisher v. Standard Ins. Co., 679
F.3d 116, 120 (3d Cir. 2012)).) Citing Halo v. Yale Health Plan, Dir. of Benefits & Recs. Yale
Univ., 819 F.3d 42, 57-58 (2d Cir. 2016), Lipani argues that the denial should be reviewed de novo
because Cigna did not fully comply with ERISA’s claims-procedure regulations. (ECF No. 17-1
at 9-10.) Lipani’s chief complaint with the procedure that Cigna followed is that “Cigna did not
provide a sufficient denial reason as required by the claims[-|procedure regulations.” (/d. at 11-
12 (citing 29 C.F.R. §§ 2560.503-1(g)(1)(G)-(¥)).)
While the Court appreciates Lipani’s arguments, the Court finds that the arbitrary-and-
capricious standard is the appropriate level of judicial review under the particular facts of this case.
The Plan grants Cigna discretionary authority: it identifies Cigna as the claims administrator and
claims fiduciary and states that “[b]enefits under each ERISA-governed plan will be paid only if
the applicable claims fiduciary decides in its sole discretion that the claimant is entitled to them.”

3 Lipani also cited case law from the United States Court of Appeals for the Third Circuit
for the proposition that the appropriate limitations period should be six years. (ECF No. 26 at 11.)
Because Cigna has conceded that the Complaint is timely, the Court does not reach Lipani’s other
arguments.

(ECF No. 15-10 at 9, 11, 12; DSMF & PRSMF { 18.) Lipani does not appear to challenge the
assertion that the Plan grants Cigna discretionary authority. (ECF No. 17-1 at 11-13.)
When an employee welfare benefit plan, as here, “grants its administrator . . . discretionary
authority, ‘[t]rust principles make a deferential standard of review appropriate,’” and a denial is
reviewed “under an ‘arbitrary and capricious’ standard.” Fleisher, 679 F.3d at 120-21 (first
quoting Firestone Tire & Rubber Co, v. Bruch, 489 U.S. 101, 111 (1989); then quoting Orvosh v.
Program of Grp. Ins. for Salaried Emps. of Volkswagen of Am., Inc., 222 F.3d 123, 129 Gd Cir.
2000)).!4 “The scope of this review is narrow, and ‘the court is not free to substitute its own
judgment for that of the defendants in determining eligibility for plan benefits.”” Doroshow v.
Hartford Life & Acc. Ins. Co., 574 F.3d 230, 234 (3d Cir. 2009) (quoting Abnathya v. Hoffmann-
La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993)); see also Cato v. Unum Life Ins. Co. of Am., Civ. No.
21-10056, 2022 WL 3013085, at *8 (DNJ . July 29, 2022) “Accordingly, deference should be
given to the lion’s share of ERISA claims.” (citation omitted)). “[P]laintiff carries the burden of
demonstrating that... the administrator’s decision was arbitrary and capricious.” Menes v. Chubb
& Son, 101 F. Supp. 3d 427, 434 (D.N.J. 2015) (citation omitted).
Nevertheless, as Lipani observes, the United States Court of Appeals for the Second Circuit
held in Halo that even when a plan grants the administrator discretion, it may be appropriate to
apply a de novo standard of judicial review if the denial of a claim fails to comply with the

Although the arbitrary-and-capricious standard is sometimes referred to as an “abuse of
discretion” standard, the United States Court of Appeals for the Third Circuit has underscored
“that ‘[iJn the ERISA context, the arbitrary and capricious and abuse of discretion standards of
review are essentially identical.’” Fleisher, 679 F.3d at 121 n. 2 (quoting Miller v. Am. Airlines,
Ine., 632 F.3d 837, 845 n.2 3d Cir. 2011)); accord Noga v. Fulton Fin. Corp. Emp. Benefit Plan,
19 F.4th 264, 276 (3d Cir. 2021) (noting that the arbitrary-and-capricious and abuse-of-discretion
standards of review are essentially identical in the ERISA context).

minimum regulatory requirements set forth by the Department of Labor, unless the administrator
can show it had established procedures in full conformity with the regulations and the failure to
comply was inadvertent and harmless.'> 819 F.3d at 45, 55-58. Lipani does not identify any court
in this Circuit following Halo’s approach, and this Court has independently found no record of the
Third Circuit adopting the approach, and the one district court to consider it chose not to do so.
See L.M. v. Metro. Life Ins. Co., Civ. No. 16-8287, 2016 WL 8193159, at *4 (D.N.J. Dec. 2, 2016)
(Shipp, J.) (“[T]he Court declines to adopt the analysis in Halo — even with the alleged, procedural
irregularities argued by Plaintiffs — the Court finds that the brief delay amounts to an inadvertent
and harmless deviation and does not trigger a de novo review.”).
More importantly, the Third Circuit Court of Appeals has held that notice deficiencies and
poor reasoning for the denial of a claim is a factor that can be appropriately considered under the
arbitrary-and-capricious standard of review and does not necessitate altering the standard to de
novo absent a “severe procedural violation.” See, e.g., Noga v. Fulton Fin. Corp. Emp. Benefit
Plan, 19 F 4th 264, 276 (3d Cir. 2021) (underscoring that “a fiduciary ... need not maintain a
procedurally immaculate claim file to avoid an abuse-of-discretion finding,” and indicating that
courts in the Third Circuit utilize a “combination-of-factors analysis”); Miller v. Am. Airlines, Inc.,
632 F.3d 837, 850-51 (3d Cir. 2011) (noting that ERISA Section 503 and accompanying
regulations set forth minimum requirements for what a plan administrator must provide when
rendering a determination, and that “an administrator’s compliance ... in making an
adverse benefit determination is probative of whether the decision to deny benefits was arbitrary
and capricious”); Becknell v. Severance Pay Plan of Johnson & Johnson & U.S. Affiliated

I The plaintiff in Halo alleged irregularities in “both the timing and content of the...
denials,”’ and the Second Circuit remanded for the district court to determine what standard should
apply in that case. 819 F.3d at 46, 61.

Companies, 644 F, App’x 205, 213 (3d Cir. 2016) (reviewing the approach of various Courts of
Appeals and suggesting that “deference” should be accorded absent
“a severe procedural violation”); see also Connor v. Sedgwick Claims Mgmt. Servs., Inc., 796 F.
Supp. 2d 568, 583 (D.N.J. 2011) (concluding that defendant’s “fail[ure] to satisfy the notice
requirements of ERISA and... 29 C.F.R. § 2560.503-1(g)(ii1) . . . weighs in favor of finding that
its decision to terminate . . . benefits was arbitrary and capricious’”’).
C. Denial of Claim for Benefits
“ERISA is a ‘comprehensive legislative scheme’ designed to ‘protect .. . the interests of
participants in employee benefit plans and their beneficiaries,’ and to do so provides for a variety
of standards and regulations for .. . ‘welfare plans.’” Am. Orthopedic & Sports Med. v. Indep.
Blue Cross Blue Shield, 890 F.3d 445, 449 (3d Cir. 2018) (first quoting Aetna Health Inc. v. Davila,
542 U.S. 200, 208 (2004); then quoting 29 U.S.C. § 1002(1)). These welfare plans “include[]
health insurance plans, and ERISA provides employees covered by such plans with the right to
sue” when necessary to obtain promised benefits. Jd. (citations omitted).
Relevant here, “Section 502(a)(1)(B) of ERISA creates a civil cause of action for a plan
participant ‘to recover benefits due to him[/her] under the terms of his{/her] plan, to enforce
his[/her] rights under the terms of the plan, or to clarify his[/her] rights to future benefits under the
terms of the plan.’” Fleisher, 679 F.3d at 120 (quoting 29 U.S.C. § 1132(a)(1)(B)). “To assert
[such] aclaim ..., a plan participant must demonstrate that “he or she . . . ha[s] a right to benefits
that is legally enforceable against the plan,’ and that the plan administrator improperly denied
those benefits.” /d. (quoting Hooven v. Exxon Mobil Corp., 465 F.3d 566, 574 (3d Cir. 2006)).
A district court must examine a variety of factors when analyzing whether a decision to
deny benefits was arbitrary and capricious, including procedural concerns about the decision-

making process and structural concerns about conflicts of interest, and the factors vary and are
“case-specific.”!® Est. of Schwing v. The Lilly Health Plan, 562 F.3d 522, 526 (3d Cir. 2009)
(“[T]he factors to be considered will be varied and case-specific.” (citing Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105, 117 (2008))).
Ultimately, “[a]n administrator’s decision is arbitrary and capricious ‘if itis without reason,
unsupported by substantial evidence or erroneous as a matter of law.’” Fleisher, 679 F.3d at 121
(quoting Miller, 632 F.3d at 844). Substantial evidence is “defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” Jd. (quoting Soubik y. Dir.,
Off, of Workers’ Comp. Programs, 366 F.3d 226, 233 (3d Cir. 2004)); accord Richardson □□
Perales, 402 U.S. 389, 401 (1971) (“{S]upported by substantial evidence . . . means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.” (quoting Consol.
Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 229 (1938))). And “[w]hen reviewing an
administrator’s factual determinations, [courts] consider only the ‘evidence that was before the
administrator when he made the decision being reviewed.’” Fleisher, 679 F.3d at 121 (quoting
Mitchell vy. Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir. 1997)); see also Noga, 19 F.4th at 275
(“But an ERISA administrative record may not be supplemented with post hoc explanations for
procedural irregularities.”).
Lipani contends that Cigna’s denial of the claim was contrary to “Modifier 53,” which
S.L.’s Plan incorporated. (See PSMF & DRSMF 4 16-18.) He notes that Cigna’s reimbursement
policy included a “Modifier Reference Guide” that stated that for “[d]iscontinued [p]rocedures —

16 Lipani does not allege a structural conflict or argue that this is a factor that should be given
any weight. However, even if there had been a structural conflict, it is not dispositive. See
Fleisher, 679 F.3d at 122 n.3 (“[T]he conflict of interest inherent in the fact that [the plan
administrator] both pays and decides what should be paid is a factor to be considered in applying
the abuse of discretion standard of review. It is not, however, inherently a determinative factor.”).

reported when a procedure is terminated by the physician or other qualified health care
professional” — “Cigna provides reimbursement for the billed procedure at 50% of the fee schedule
or other allowed amount when [M]odifier 53 is appended correctly.” (ECF No. 17-3 at 104, 106.)
Because the claim for Lipani’s alleged services on December 27, 2019 had “Modifier 53 appended
to each and every CPT code,” Lipani insists that he is entitled to reimbursement at the appropriate
level. (ECF No. 17-1 at 17-18.)
Further, Lipani accuses Cigna of imposing an “unsupported” incision requirement because
Cigna cited to the fact that Lipani did not make an incision on December 27 when it repeatedly
denied Lipani’s claim. (/d. at 18-19.) Lipani observes that the “American Medical Association’s
CPT manual” states that Modifier 53 “should not be used prior to the induction of anesthesia,” and
he encourages the Court to interpret this as endorsing his position that, once anesthesia is
administered, the procedure has begun, and the surgeon is entitled to charge even if he or she does
not perform any of the anticipated steps in the surgical procedure, including not making an
incision. (ECF No. 26 at 20.)
In opposition, Cigna contends that its denial was consistent with the plain terms of the Plan,
which states that “[c]harges not covered include: . . . [cJharges submitted for services that are not
rendered.” (ECF No. 16 at 18-19; ECF No. 15-10 at 4, 8.) As to Modifier 53, Cigna submits that
it does not apply in this case because the “record demonstrates that the services for which Plaintiff
billed... were never started.” (ECF No. 16 at 19.) Cigna underscores that S.L. “was not even
positioned on the table” for surgery, let alone that any “of the nine procedures for which CPT codes
were approved [and billed] were started.” (/d.)

Having canvassed the record and considered the parties’ respective positions, the Court
finds no basis for disturbing Cigna’s denial of Lipani’s claim for the abandoned December 27,
2019 surgery.
As Lipani’s own report from that morning makes clear, after S.L. “was placed under
general anesthesia” and “[p]rior to positioning [her] prone on an open Jackson table, .. . [S.L.]
exhibited significant hypotension, and . . . [alfter some discussion between [Lipani] and the
anesthesia physicians, [they] decided to abort the surgery.” (ECF No. 16-3 at 3.) Asa result, S.L.
“was woken up from anesthesia... and taken to the Postoperative Care Unit.” Ud.) Lipani made
no record of starting any surgical procedure or performing any specific action during the one hour
that S.L. was in the operating room other than having a discussion with 8.L.’s anesthesiologist
about the risks posed by her hypotension and unstable blood pressure, which led to the planned
surgery being called off.
Thus, when Cigna received Lipani’s claim in the amount of $558,996.00 for services
allegedly rendered on December 27 — billing under different CPT Codes for various surgical
procedures — its denial stated that “the billed charges . . . d[id] not meet the criteria for ...
payment.” (ECF No. 16-9 at 2.) Specifically, next to each billed CPT Code, Cigna wrote that
Lipani’s “[o]perative report d[id] not support procedures performed as billed. Documentation
clearly states surgery was aborted prior to skin incision being made.” (/d. at 5.)
When Lipani resubmitted a “corrected” claim in the amount of $322,072.00 for those same
alleged services, Cigna denied it a second time for the reasons it had outlined previously. (ECF
No. 16-11 at 2-6.) And on appeal, Cigna confirmed that its denial was because the billed services
were “not supported by the documentation provided with the claim submission” and that “services
or procedures not clearly detailed will not be considered for reimbursement.” (ECF No. 16-12 at

3.) In contrast to the denial of Lipani’s claim for December 27, it is undisputed that Cigna paid
the anesthesiologist and covered the facility fee for that day. (PSMF & DRSMF § 12
(“[Statement:]... [T]he facility and anesthesia claims for the same procedure and date of service
were paid. [Response:] Admitted.”); see also ECF No. 16-6 at 14.)
On this record, the Court cannot find fault in Cigna’s interpretation of the Plan or the denial
of Lipani’s claim. The Plan states that charges “for services that are not rendered” are “not
covered,” and Lipani does not contend that he actually performed the services for which he billed.
(ECF No. 15-10 at 4, 8.) Instead, Lipani invokes Modifier 53 for “[d]iscontinued [p]rocedures,”
and asks this Court to effectively hold that once a patient is given general anesthesia, the surgeon
should be permitted to charge and be reimbursed for the various surgical procedures that were
planned, even if the surgeon does none of them. The Court cannot do so.
Cigna’s reading of the Plan to require that services be rendered prior to a treating physician
charging for them is reasonably consistent with the Plan’s unambiguous language. See Dowling
y. Pension Plan For Salaried Emps. of Union Pac. Corp. & Affiliates, 871 F.3d 239, 245 3d Cir.
2017) (“[W]e will not set aside the administrator’s interpretations of ‘unambiguous plan language’
as long as those interpretations are ‘reasonably consistent’ with the plan’s text.” (quoting /eisher,
679 F.3d at 121)). To the degree that Modifier 53 is ambiguous as to when a surgical procedure
commences and then is “[d]iscontinued,” Cigna’s determination that Lipani had not discontinued
the surgical procedure because it never commenced — the patient was wheeled in and out of the
operating room without the surgeon either positioning the patient prone on the operating table or
making an incision!’ — was certainly a reasonable exercise of the discretion afforded to it as the

7 In many ways, Lipani’s emphasis on the fact that the procedure was canceled after
anesthesia was administered is misleading. His own report notes that as part of administering the
general anesthesia, it became evident that it would be risky to proceed further; thus, the planned

Plan administrator and claims fiduciary. See id (“[Wle will only disturb the administrator’s
interpretations of ambiguous plan language when those interpretations are ‘arbitrary and
capricious.’”); see also Patrick v. Reliance Standard Life Ins. Co., 694 F. App’x 94, 97 (3d Cir.
2017) (‘[W]e conclude that [the administrator’s] interpretation of the Plan was reasonable and,
therefore, should not be disturbed.”).
Moreover, Cigna’s reasoning for its denial — that the “[o]perative report d[id] not support
procedures performed as billed” (see ECF No. 16-9 at 5; ECF No. 16-11 at 5; ECF No. 16-12 at
3) —is consistent with the arguments it now advances. Although Cigna could have provided greater
detail during the administrative process, the Court does not find under the facts of this case that
the explanation provided was so vague or conclusory as to leave Lipani with no choice but to
speculate, which would have denied him the opportunity to a full and fair review. See C.E. v.
Excellus Blue Cross Blue Shield, Civ. No. 14-6950, 2017 WL 593492, at *10 (D.N.J. Feb. 14,
2017) (Wolfson, C.J.) (“In the context of reimbursement claims, a plan administrator satisfies the
minimum procedural requirements when it specifically explains, for example, that the claim was
not properly documented, or ‘the charges exceeded the reasonable and customary fees, or were
improperly bundled.’” (quoting Diagnostic Med. Assocs., M.D., P.C. v. Guardian Life Ins. Co. of
Am., 157 F. Supp. 2d 292, 300 (S.D.N.Y. 2001))). Cigna repeatedly stated that the operative report
from Lipani did not support payment for the services billed, underscoring that Lipani had not even
made an incision on December 27. The basis of the denial was thus clear and reasonable under
the Plan. Accordingly, the Court finds that Cigna did not abuse its discretion in denying Lipani’s
claim for the services he charged for but did not render on December 27, 2019.

procedure could be viewed as having ended at the anesthesia stage, not after. (See ECF No. 16-3
at 3 (“[T]he anesthesiologist was having difficulty maintaining her blood pressure... .
Consequently, .. . [a]fter some discussion ... , we decided to abort the surgery ....”).)

Even if the Court were to review the denial de novo, it would find Cigna’s determination
correct under the terms of the Plan. When the Plan is read as a whole, it is apparent that a surgical
procedure must have commenced in some concrete way prior to discontinuation for a physician to
be eligible for reimbursement. To interpret it otherwise ~ that is, to allow a surgeon to charge for
various planned surgical procedures, even when the physician has taken no surgical action in
furtherance of those procedures — would create an intolerable contradiction in the express terms of
the Plan by rendering mere surplusage the provision that states that the Plan will not cover services
that are not performed. See Chavis v. Plumbers & Steamfitters Loc. 486 Pension Plan, 612 F.
Supp. 3d 516, 543 (D. Md. 2020) (“[I]n interpreting a plan, ‘[c]ontract terms must be construed to
give meaning and effect to every part of the contract, rather than leave a portion of the contract
meaningless or reduced to mere surplusage.’” (quoting Goodman v. Resol. Tr. Corp., 7 F.3d 1123,
1127 (4th Cir. 1993))). Because the express terms of the Plan should be read in a coherent manner,
the Court believes that Cigna’s interpretation was the correct one.!® See Viera v. Life Ins. Co. of
N. Am., 642 F.3d 407, 413-14 (3d Cir. 2011) (“[I]f we exercise de novo review, the role of the
court ‘is to determine whether the administrator ... made a correct decision.’ ... The court must
review the record and ‘determine whether the administrator properly interpreted the plan and
whether the insured was entitled to benefits under the plan.’” (quoting Hoover v. Provident Life
& Ace. Ins. Co., 290 F.3d 801, 809 (6th Cir. 2002))).
Therefore, summary judgment will be granted in favor of Cigna and the case closed.

18 Lipani suggests that if the Court does not overturn the denial of his claim it will somehow
“encourage bad medicine ~— specifically, that the doctor knows he can’t proceed, but will cut
anyway.” (ECF No. 17-1 at 18.) This is not a persuasive argument as a physician owes his or her
patient a duty of care and acting against the interests of a patient simply to bill greater amounts
could expose a physician to liability and professional consequences.

IV. CONCLUSION
For the foregoing reasons, and other good cause shown, Plaintiff's Motion for Summary
Judgment (see ECF No. 17) is DENIED, and Defendant’s Motion for Summary Judgment (see
ECF No. 15) is GRANTED. An appropriate Order follows.

Dated: June 28, 2023
UNITED STATES DISTRICT JUDGE

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10655814. Public record. Not legal advice.