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Aetna, Providers Battle Over Billing Practices

By Christopher Cheney  
   March 05, 2015

Many of the allegations in Aetna's lawsuit have already been aired in court and rejected, she says, referring to a counter-claim the payer filed in the suit that North Cypress launched in 2013. "It's the same complaint filed in a different courtroom. It's classic venue shopping. We're confident this will be sent to the old judge and dismissed, or the new judge will dismiss it. This is the way Aetna does business."

The North Cypress lawsuit against Aetna is slated to go to trial in October.

North Cypress' attorney in the legal struggle with Aetna, J. Douglas Sutter of Houston-based Kelly, Sutter & Kendrick PC, says self-interest is the prime motivation behind the $120 million lawsuit that the insurance carrier filed last month. "There's an incredible amount of competition among the payers. Big plan sponsors like school districts will jump from payer to payer every two years to get the best deal."

Sutter says Aetna has filed multiple lawsuits across the country on behalf of plan sponsors so the insurance carrier can bank a percentage of court-ordered restitution. "The majority of these claims come from plan sponsors." Payers, he says, are awarded as much as 50% of restitution garnered from healthcare providers in billing-practice lawsuits. "[Payers] have a financial incentive in these cases because there is a contingency."

Aetna Filing Coast-to-Coast Lawsuits
Neugebauer, who has been litigating Aetna lawsuits for two decades, says the Connecticut-based payer began noticing a spike in billing for medical services in 2009 and started filing suits related to billing practices in 2010.

"We saw groups of physicians had dramatically increased their charges. Their charging practices were way outside the norm. They were billing at 9,000% of the Medicare rate and expecting to get paid for it."

In addition to the lawsuit against North Cypress, Neugebauer says Aetna has sued physician practices, surgical centers, and other provider organizations in many states, including California, New Jersey, and Pennsylvania. He says the payer has been forced to go to court because strict federal laws against patient referral schemes and kickbacks in Medicare and Medicaid billing do not apply to commercial payer contracts. "We don't have that same kind of regulatory framework or enforcement on the commercial side," he says.

In April 2012, Aetna filed a lawsuit against Houston-based Humble Surgical Hospital, LLC that includes accusations similar to those the payer has leveled in its legal dispute with North Cypress.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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