Aetna Wins $37.4 Million Verdict In Case Against Fraudulent Overbillings and Payment of Kickbacks

Wednesday, April 20, 2016
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law


On April 14, 2016, a jury in California awarded Aetna Inc. more than $37.4 million in damages after finding a network of Northern California surgical centers overbilled the insurer for out-of-network procedures. The verdict comes from a complex scheme in which referring physicians received substantial kickbacks for services over a three-year period from 2008 to 2011.


Details of the Complex Fraud Scheme.

The victory for Aetna ends a month long trial and four years of litigation against a total of ten defendants. Included in the list of defendants were the centers, Bay Area Surgical Management LLC and the organization’s three co-founders.

The surgical centers recruited patients by offering to waive co-pays and other fees and through selling shares in the facilities to referring physicians who received handsome returns on their investments, in addition to their own fee for medical services, according to the complaint filed by Aetna Life Insurance Co.

According to Aetna, instead of charging the patients a co-payment for their out-of-network services, that bill was included in the service claims forwarded to the insurer for reimbursement, reaping “illegal and exorbitant profits, since those facilities already came with premium prices. Within a three-year time period, from 2008 to 2011, the surgical centers billed Aetna $23 million for approximately 1,900 procedures that should have cost about $3 million total, according to Aetna—a 771 percent increase.

Richard Doren, the lead counsel from Gibson Dunn & Crutcher LLP, which represented Aetna, has stated in media accounts that the case exposed an “insidious scheme” through which employers and health plan members paid the price as a result of the fraudulent medical bills. “We are gratified that the jurors, after weighing the overwhelming evidence, rendered a verdict that left no doubt that this fraud cannot be tolerated,” he said in a written statement.

To read the final verdict, click here.


Defendants Disagree With Verdict.

An attorney for Bay Area Surgical Management, Michael Amir of Doll Amir & Eley LLP, said the defendants will appeal. “Although we respect the jury, we think they got it absolutely wrong,” Amir told Law360.

According to Amir, it is the health care insurer's responsibility to manage what it paid out for procedures and it shouldn’t blame the defendants for its own failures. “Aetna’s entire theory here is that it was duped. It looked at the bills and just paid the bills thinking they were just the bills,” Amir said. “When in reality, everyone in the industry knows that the bills are just the sticker price and it's the insurance company, it’s Aetna, who should determine how much it should pay.”

Despite the defendants counter arguments, the jury unanimously sided with Aetna on all six causes of action, including fraud, intentional interference with contractual relations and unjust enrichment.

To read one of our prior blogs on medical billing fraud and overpayments, click here.


Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues, Fraudulent Billing and Overbilling Now.


The attorneys of The Health Law Firm represent healthcare providers in cases of medical billing fraud, overbilling, Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.


Sources:

“Aetna Wins $37.4M Jury Verdict Over Medical Billing Fraud.” News Insurance. (April 15, 2016) Web.

Eslinger, Bonnie. “Aetna Wins $37.4M Jury Verdict Over Medical Billing Fraud.” Law360. (April 15, 2016). Web.


About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.            


KeyWords: Medical billing fraud, fraudulent billing, overbilling, submitting false claims, kickbacks, fraudulent reimbursement from insurer, Aetna Inc., illegal kickback scheme, legal representation for health care professionals, health fraud defense lawyer, health law defense attorney, health law, The Health Law Firm

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

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4/20/2016

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