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Analysis

Aetna Wins Arbitration Appeal, to Pay HCA Hospitals $86M

By Jack O'Brien  
   May 06, 2019

According to an SEC filing, the CVS Health subsidiary surrendered much less than the $150 million HCA had originally sought.

Aetna, the CVS Health subsidiary, will pay HCA Healthcare-owned hospitals $86 million to settle arbitration proceedings regarding its out-of-network policies, significantly less than the $150 million the hospital operator sought in the case.

The settlement, announced as part of a Securities and Exchange (SEC) filing by CVS Health, brings an end to legal proceedings that originated in August 2015 when HCA Holdings, Inc. challenged Aetna's out-of-network "benefit payment and administration practices" in Florida from 2014 to 2016. 

HCA claimed Aetna paid too little to its members as well as providers for services rendered while also failing to "timely or appropriately" administer claims or benefits. 

Related: $405M in Facilities Sale Drives Busy Q1 for HCA

Aetna stopped offering individual exchange products in the Sunshine State at the end of 2016. 

While the trial arbitrator awarded the HCA hospitals the requested $150 million in October 2018, Aetna appealed the decision and the appellate arbitrator reduced the award to $86 million in late March. 

Related: In First Quarter of Combined Operations with Aetna, CVS Revenues Jump 35%

CVS stated in the filing that it recorded the $86 million reduction in its Q1 earnings report as a "measurement period adjustment" to its Aetna acquisition accounting. 

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: DECEMBER 2013 - BERLIN: the logo of the brand "Aetna". - Image / Editorial credit: 360b / Shutterstock.com


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