State medical associations charge Aetna illegally threatens to punish docs for out-of-network referrals
LOS ANGELES – A lawsuit filed July 3 by roughly 50 doctors and a number of California medical groups including the Los Angeles County Medical Association and the California Medical Association accuses health insurer Aetna of regularly and systematically threatening doctors within its network with having their contracts with Aetna terminated for making out-of-network referrals.
Under the lawsuit, the plaintiffs are seeking to stop Aetna from using the coercive tactics and restitution for doctors and patients who may have been harmed by the company's actions. The plaintiffs are also seeking triple damages as provided for under the Lanham Act.
"What we are saying is: 'don't be intimidating to patients or to doctors. Don't hurt the doctor-patient relationship of trust,'" said Rocky Delgadillo, CEO of Los Angeles County Medical Association (LACMA). "It is the most critical relationship of trust in the entire healthcare system and when you do things like threaten to take doctors out of the network and send messages to patients, that does start to erode the level of trust between a doctor and patient. When it comes to care, the doctor should be able to say what makes sense."
But officials at Aetna contend the lawsuit is part of a wider dispute between the health insurer and physicians over self-referral practices – instances where doctors will refer patients for care to facilities without informing their patients they have an ownership interest or are getting paid for their referrals.
In February, Aetna filed a lawsuit against Bay Area Surgical Management (BASM) and seven other ancillary facilities alleging a pattern of self-referrals among doctors and the facilities and contended that the charges from these facilities are significantly higher than the average in-network charges
"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," said Aetna spokesperson Anjanette Coplin. "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.
Aetna contends the lawsuit filed this week is nothing more than a countersuit, filed under the guise of a mass-action lawsuit
Delgadillo says that is simply not the case, as he has been working on recruiting medical associations and individual doctors to take part in the lawsuit since late last year. Further, he discounts the February lawsuit's contention that doctors are acting in an unethical way. "We are very confident that doctors across the state live up to their ethical obligation to disclose any interests that they have in any treatment center or any other provider," he said.
Included as a plaintiff in the July lawsuit is an unnamed man who purchased a preferred provider organization (PPO) plan from Aetna in 2007. The suit alleges that despite the PPO plan offering both in-network and out-of-network coverage, the company "repeatedly and inappropriately attempted to discourage the patient from using those benefits." To date, Aetna has paid $9,000 of the $70,000 billed for the patient's care at Los Altos Surgery Center, it alleges
"The handling of this case is egregious, but unfortunately it's not an isolated instance," wrote Los Angeles attorney Daron L. Tooch in the complaint. "Doctors, not insurance clerks, should be the ones making the decisions about when and how to provide quality patient care.
Muddying the waters, however, is the fact that Los Altos Surgery Center is one of the facilities named in Aetna's February lawsuit alleging doctor self-referral and inflated prices charged by the facilities as a result.
Aetna's complaint also contends that non-medical management at the BASM facilities would "cherry pick" patients by directing Aetna participating providers who had an ownership interest in BASM to refer those patients to BASM
"These egregious business practices, if not stopped, will continue to drive up the cost of care and health insurance for everyone," Coplin concluded. "We will continue to pursue any medical provider whose charges are so grossly out of line."