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This is my first thought, what diagnosis did you use exactly use to justify this procedure, a S diagnosis? This minor procedure CPT 11730 requiring anesthesia is a procedure and then removal of a nail for a traumatic injury CIGNA should pay but again what was diagnosis code paired with the CPT 11730.  Each plan has different aspects that the employer may and may not cover. Ask CIGNA for the specific insurance your patient had for their plan summary document as each employer picks what is covered as an ERISA plan, unfortunately certain codes may be excluded. If not covered it is patient responsibility.

It was paired with ICD-10-CM diagnosis L60 could that be a reason?

When you receive a UPIC (Unified Program Integrity Contractor) audit, CMS (Centers for Medicare & Medicaid Services have intensified their efforts to identify organizations with improper billing practices, so they feel you are not billing properly. The UPIC contracts operate in five (5) separate geographical jurisdictions in the United States and should identify who they are, you should seek a healthcare attorney on your own with experience in UPIC's and/or your administrative defense fund advisors before you proceed. You usually are given 15 days from the date the letter is written, if you plan on appealing, make sure you timely notify in writing the UPIC that you are appealing their findings. Get a confirmation they received your request to appeal their determination.

This can get a bit complicated, so please provide more information as to the relationship of the dispensing to the supplier and where the device was dispensed (office, SNF, patient's home), is the dispenser reassigning their benefits as a 1099 consultating provider to the practice or a W2 employee?