Cigna Health and Life Insurance Company has agreed to a $5.7 million settlement to resolve a class-action lawsuit alleging the insurer misrepresented out-of-network providers as in-network within its directories. This case underscores the growing scrutiny over the accuracy of insurer provider directories, often referred to as “ghost networks,” which can mislead patients about available in-network care options.
The lawsuit was initiated by Andrew and Andrea Hecht in July 2024 on behalf of participants in Cigna-administered health plans. They contended that Cigna’s inaccurate provider directories violated the Employee Retirement Income Security Act (ERISA) by failing to uphold plan terms and breaching fiduciary duties. The Hechts cited personal harm, including a hospital bill they believed was covered in-network but was later sent to collections after coverage was denied. ([parrellahealth.law](https://www.parrellahealth.law/cigna-settles-erisa-ghost-network-lawsuit?utm_source=openai))
In May 2025, U.S. District Judge Manish S. Shah dismissed certain claims, including those seeking to recover benefits under ERISA, due to insufficient allegations of wrongful benefit withholding. However, the claim regarding breach of fiduciary duty was allowed to proceed, as the complaint sufficiently alleged harm resulting from inaccurate in-network information. ([parrellahealth.law](https://www.parrellahealth.law/cigna-settles-erisa-ghost-network-lawsuit?utm_source=openai))
Following mediation with retired Judge James Holderman on August 4, 2025, the parties reached a settlement in principle. A joint status report filed on August 25 confirmed the agreement, with plaintiffs expected to seek preliminary court approval by September 19. While specific terms have not been disclosed, the settlement highlights the legal risks insurers face when their provider directories do not accurately reflect network realities. ([parrellahealth.law](https://www.parrellahealth.law/cigna-settles-erisa-ghost-network-lawsuit?utm_source=openai))
This case is part of a broader trend of increased litigation against insurers for publishing directories containing nonexistent providers, incorrect contact information, or misrepresented network statuses. Such inaccuracies can lead to unexpected out-of-network charges for patients and potential legal liabilities for insurers. ([law360.com](https://www.law360.com/classaction/articles/2395988/cigna-inks-5-7m-ghost-network-suit-settlement?utm_source=openai))
For healthcare providers, especially those in behavioral health and substance use disorder services, this development emphasizes the importance of ensuring accurate representation in insurer directories. Mislistings can lead to reimbursement disputes, contract issues, and investigations. Providers are advised to monitor how their practices are listed and document any discrepancies to safeguard against potential disputes. ([parrellahealth.law](https://www.parrellahealth.law/cigna-settles-erisa-ghost-network-lawsuit?utm_source=openai))
As the healthcare industry continues to evolve, the accuracy of provider directories remains a critical issue, with both insurers and providers bearing responsibility for maintaining up-to-date and truthful information to ensure patient trust and compliance with federal regulations.