A lawsuit filed July 3 by doctors and medical groups including the Los Angeles County Medical Association and the California Medical Association accuses health insurer Aetna of systematically threatening to deny coverage to members who receive out-of-network referrals for healthcare.
The lawsuit additionally alleges the insurer threatens doctors within its network with having their contracts with Aetna terminated for making out-of-network referrals.
"Aetna is putting profits ahead of patient's health and safety; that's immoral and too often it is also illegal," said Rocky Delgadillo, CEO Los Angeles County Medical Association in a press release. "The insurance company interferes not only with doctor-patient relationships, but also harms the ability of California healthcare providers to get sick people the care they need in a professional and timely manner."
But officials at Aetna contend the new 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 in a statement. "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 class-action lawsuit. "This is clearly retaliation against Aetna for our actions to prosecute physicians who are not looking out for our members," Coplin added.
But the plaintiffs in the new lawsuit allege Aetna is engaging in a number of violations of state law including false advertising, unfair business practices and intentional and negligent interference with healthcare providers. It seeks to enjoin Aetna from these practices, compensation for members and doctors affected and triple damages as provided for under the Lanham Act.
Also included as a plaintiff in the 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," according to the complaint. To date, Aetna has paid only $9,000 of the $70,000 billed for the patient's care at Los Altos Surgery Center, the lawsuit alleges. It also charges that Aetna later refused to authorize payment for a surgery referred by the same doctor unless it was performed at an in-network facility.
"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."
Los Altos Surgery Center, however, is one of the facilities named in the 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's statement concluded. "We will continue to pursue any medical provider whose charges are so grossly out of line."