In a significant ruling for the healthcare and insurance industries, the U.S. Court of Appeals for the Sixth Circuit handed down a decision on July 1, 2025, in AMISUB (SFH), Inc. v. Cigna Health and Life Insurance Co., affirming the dismissal of claims by two Tennessee hospitals seeking full reimbursement for emergency services rendered to out-of-network Cigna members. The ruling clarifies the limits of insurer obligations under federal and state law—particularly the ACA, EMTALA, and Tennessee common law.
Case Background: What Sparked the Dispute?
Saint Francis Hospital and Saint Francis Hospital-Bartlett—operating under AMISUB (SFH), Inc.—previously had an in-network reimbursement agreement with Cigna Health and Life Insurance Company, but that agreement expired in early 2019. From that point forward, the hospitals provided emergency medical care to Cigna-insured patients on an out-of-network basis.
Citing EMTALA (Emergency Medical Treatment and Labor Act), which requires hospitals to provide stabilizing emergency care regardless of payment ability, the hospitals argued that Cigna exploited this obligation by underpaying for emergency care. They filed suit in 2021 under Tennessee common law, asserting claims for quantum meruit and unjust enrichment, seeking compensation equal to the “reasonable value” of the services rendered.
The Core Legal Issue: Must Insurers Pay Full Charges for Emergency Care?
At the heart of the dispute was whether Cigna is legally obligated to pay the full, billed charges (or “reasonable value”) for out-of-network emergency services—even when its insurance contracts limit reimbursement.
The hospitals did not claim Cigna breached its contracts with members or failed to meet ERISA obligations. Instead, they alleged that state and federal laws created a quasi-contractual duty for Cigna to pay more than it had agreed to under its member plans.
Sixth Circuit’s Ruling: No Quasi-Contract, No Duty to Pay More
The Sixth Circuit rejected the hospitals’ claims, holding:
- No federal law (including the ACA or EMTALA) imposes a duty on insurers to cover the full cost of out-of-network emergency care.
- Tennessee law, including common law doctrines of unjust enrichment and quantum meruit, does not create an equitable duty for insurers to pay providers more than their contractual obligations.
- The hospitals failed to plead a viable common law claim because Cigna had no legal duty to pay full billed charges beyond what was specified in its insurance plans.
Federal Law Perspective
The court interpreted the ACA’s requirement for “coverage” of emergency services as not equivalent to “payment in full.” It emphasized that the “greatest-of-three” rule under ACA regulations allows insurers to choose among three benchmarks to determine payment—and still permits balance billing by providers.
Tennessee Law Perspective
Under Tennessee law, unjust enrichment requires a benefit that would be unfair to retain without payment. However, the court found no unjust retention since Cigna fulfilled its obligations to members and had no additional duty to hospitals absent a contract.
