3 Health Systems Sue Aetna for Breach of Contract

One of the biggest insurers is in trouble again.

Facing legal heat once again, Aetna just can’t seem to stay out of the spotlight. On April 16, a group of three Pennsylvania health systems sued Aetna for breaching the terms of their contract with Bridges Health Partners.

Aetna had been allegedly subtracting the cost from supplemental benefits such as meals and gym memberships from Centers for Medicare & Medicaid Services funds intended for patient care. In the contract, Aetna was supposed to reward Bridges with a share of the cost savings that were below a specific medical cost target, then they were to provide additional payments for meeting agreed upon quality metrics, according to a press release.

However, Aetna did not pay what was due and instead stacked up the supplemental benefit costs that included gift cards and over-the-counter medications, which were only available through Aetna’s parent company CVS, therefore directing millions of dollars towards CVS and charging the cost back to Bridge providers.

Bridges alleges that Aetna was funneling money back to parent company CVS and called the supplemental programs "marketing expenses" designed to attract more members.

Bridges also stated in the press release that the health system is losing millions of dollars that it earned in shared savings, which is impacting the financial wellbeing of Bridges’ providers.

Dr. Robert Zimmerman, Bridges Health Partners president and chief medical officer said in the press release: “While the incentives are good programs, they are not critical care health programs. They are supplemental programs that potentially erode a patient’s care at our providers. If we have to pay for the incentives, we cannot provide cost-saving, patient-centered care. It’s egregious manipulation but also a breach of our contract with Aetna.”

Bridges Health Partners requested that a judge issue an injunction that would require Aetna to abide by the terms of its contract as well as reimbursement of funds and legal fees.

“Health plan organizations, like Aetna, are setting record profits while community-based hospitals and health systems are struggling. This is a national crisis,” John Grese, Bridges Health Partners vice president of administration, said in the press release. “If the insurance agency corporate giants are not stopped, community health care will be obsolete, putting thousands of doctors, nurses, and staff out of jobs and the very people needing treatment will be the ones who suffer. “

Last year, Aetna’s peak revenue was $60.6 billion, roughly about $1.3 million to each employee out of 47, 950 employees.

This isn’t the first time Aetna has geared up for a lawsuit. Last year, the insurance giant saw 21 lawsuits in just one week. A New Jersey federal court accused Aetna of failing to fund reconstructive surgery for breast cancer patients who’ve had mastectomies.

Aetna was also hit with a different lawsuit last month for allegedly discriminating against non-heterosexual patients through its coverage of fertility treatments. The case moved forward after a federal judge dismissed one of the lawsuit’s three claims.

An audit by the U.S. Department of Health and Human Services' Office of the Inspector General from last year also found that Aetna received an estimated $25.5 million in Medicare Advantage overpayments for 2015 and 2016.

This case with Bridges Health Partners could have the potential to reshape Medicare Advantage supplemental benefits. The case could prompt insurers to possibly do away with coverage of benefits such as gym memberships and over-the-counter medications.

Another possible outcome could be Aetna facing a bumpy road to securing future provider contracts. As the cases (and new coverages) pile up, health systems are surely aware of Aetna’s alleged dishonest practices. The consistent court cases could potentially shine a softer light on other insurers when it comes to contract renewals. As Aetna gets battered in court, other payers should take note of the legal repercussions when they breach the terms of their contracts; providers and health systems have no interest in working with manipulative partners.