Two parents lost their daughter after she was born about 13 weeks early.
They later received an unexpected medical bill for over $257,000.
Their insurer accidentally paid out after they switched providers, and wants to be repaid.
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A couple was billed for $257,000 by an insurance company after their premature baby died aged 25 days.
Brittany Giroux Lane and Clayton Lane received a demand for payment this summer, The New York Times reported.
The bill was from Cigna, which paid out the sum to Mount Sinai West hospital in Manhattan in error for the care of Alexandra, who was born 13 weeks prematurely and lived for less than a month.
In reality, the care had already been covered by UnitedHealthcare, which the couple switched to just before she was born. But while trying to get the money from the hospital, Cigna pursued the grieving parents.
Alexandra was born prematurely at the Mount Sinai West hospital in midtown New York 18 months earlier, a few days before Christmas 2018, The New York Times reported.
She died on the morning of Jan 15, 2019, per the Times. But it took around 18 months longer for the first demand to arrive.
"For them, it's just business, but for us it means constantly going through the trauma of reliving our daughter's death," Clayton Lane told the Times.
"It means facing threats of financial ruin. It's so unjust and infuriating."
According to The Times, Lane switched her healthcare after giving birth. Cigna was supposed to cover the bill for the 2018 care, while UnitedHealthcare was supposed to take on the bill for care provided in 2019, the Times reported.
But Cigna covered the whole bill, overpaying by $257,000. UnitedHealthcare also paid, meaning that the bill was paid twice in full, per the Times.
Although Cigna was already in talks with the hospital to get a refund, the couple received a notice asking them to pay the amount in full in the summer of 2020. They contacted the hospital, who said it would be dealt with, only to receive another notice in July 2021.
The Lanes have filed a complaint against Cigna.
In a statement, Mount Sinai said: "It is normal business practice to reconcile accounts with insurers in this manner. It is not typical for an insurer to pursue a patient in this way," the Times reported.
"Our Alexandra was the light of our life," Ms Lane said in a tweet on Tuesday, adding: "I hope that her story can help people understand challenges in our system."
Her husband Clayton also tweeted on Tuesday: "The power these billion-dollar corps hold over people's lives is unreal. But we hope our story encourages @Cigna @MountSinaiNYC Admin and other providers to approach families with kindness and compassion."