It is not known whether any clinical laboratories or pathologists are plaintiffs in this unusual lawsuit of providers versus health insurer
When it comes to out-of-network policies, clinical laboratories clinical laboratory are not the only unhappy class of providers. In California, a coalition of healthcare organizations, physicians, and providers is suing the nation’s third-largest health insurer for its policies and practices relating to out-of-network providers.
It was in July when the Los Angeles County Medical Association (LACMA), California Medical Association (CMA), and various healthcare organizations and providers filed a lawsuit against Aetna Health of California, Inc. (Aetna CA). Aetna CA is a division of Aetna Health Management (NYSE:AET), based in Hartford, Conn.
The lawsuit was filed July 3 in the Los Angeles County Superior Court. It pertains to Aetna’s higher-cost preferred provider organization (PPO) and point-of-service (POS) policies, a story in the Los Angeles Business Journal reported. Aetna markets these policies as giving members greater flexibility in getting care from out-of-network providers.
According to CMA legal counsel, Long X. Do, Aetna’s practices violate California law and interfere with doctors’ medical decisions, according to a story published at amednews.com. “When a physician within Aetna’s network acts in the best interest of a patient to refer to an out-of-network provider, that physician is exercising their best medical judgment,” Do stated. “Aetna is trying to get in the way of that doctor-patient relationship.”
Suit Alleges Aetna Threatened to Terminate Doctors’ Contracts for Out-of-Network Referrals
The allegations against Aetna included false advertising, breach of contract, unfair business practices, and interference with healthcare providers, noted a story in the Insurance Journal. Specifically, the plaintiffs accused Aetna of threatening patients with denial of coverage if they visit doctors outside the insurer’s provider network. This is despite the fact that the patients purchased policies giving them the right to choose providers, including out-of-network providers.
Further allegations included charges that Aetna underpays out-of-network physicians, refuses to authorize some out-of-network services, and illegally terminates the contracts of doctors who make such referrals, the amednews reporter wrote.
The suit seeks an immediate injunction, compensation for patients and physicians, and punitive damages.
Aetna Claims Physicians and Health Centers Are Overbilling
Aetna spokeswoman Anjanette Coplin called the suit baseless and denied the insurer is mistreating physicians. “Doctors who entice patients to have procedures performed at out-of-network facilities that they own without the patient’s knowledge are putting profits over their patients,” she stated to amednews.com. “The wildly inflated bills of these facilities drive up the out-of-pocket costs for unwitting patients and needlessly add to premium costs for everyone.”
Rocky Delgadillo, former Los Angeles City Attorney and Chief Executive Officer of LACMA, claimed that Aetna has strong-armed physicians for years over out-of-network decisions, amednews reported. “Doctors in L.A. County and doctors around the state felt as though Aetna was bullying them and using their clout in an illegal and immoral way,” Delgadillo stated. “We’re asking the court to step in and stop this practice.”
In the last year, Aetna initiated four legal challenges related to overbilling claims against physicians and health centers. The insurer filed suits in California, New Jersey, New York and Texas, amednews stated. They accused doctors of drastically overbilling for out-of-network services. They also alleged that some in-network physicians received kickbacks for the referrals.
In February of this year, Aetna filed a lawsuit against several California facilities, including Bay Area Surgical Management (BASM) and seven ancillary facilities. The insurer claimed that physicians referred Aetna members to BASM without revealing the fact that they had an ownership interest in that facility, or that BASM paid them for those referrals.
Aetna claims that the lawsuit filed by CMA was in retaliation for the suits it filed alleging overbilling. “We have sued some of these same doctors and surgery centers named in this suit for their egregious billing practices,” Coplin stated in the amednews story. “This is a countersuit disguised as a class-action lawsuit. We will continue to pursue medical providers whose charges are so grossly out of line.”
Do rebutted those statements and said that CMA’s suit has nothing to do with Aetna’s suits. Instead, he stated that the CMA lawsuit focuses on Aetna’s policies and practices.
The Los Angeles Business Journal reported that LACMA called Aetna’s response a “recycling [of] unproven allegations” and noted that doctors and associations beyond those named in Aetna’s earlier lawsuit had joined in an “unprecedented collective voice of doctors up and down this state.”
Lawsuit Could Inspire Similar Filings by Clinical Labs and Pathologists
Pathologists and clinical laboratory managers will obviously recognize how Aetna’s actions to restrict out-of-network referrals is one core issue in this interesting lawsuit. In fact, it would not be a surprise if the legal issues in this lawsuit inspired some regional laboratories which Aetna has excluded from its provider network to band together and file their own lawsuit against this insurer.
Certainly it is unusual for state medical associations, physicians, and other healthcare providers to come together and sue a major insurer. That fact alone makes this a noteworthy event. Many different types of healthcare providers stand to benefit from any favorable legal precedent that might eventually result from the resolution of this lawsuit.
—Pamela Scherer McLeod