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Practices

Aetna’s Improper Payment Practices
January 17, 2012

It has come to our attention that Aetna may be engaging in improper practices concerning out-of-network providers and physician-owned surgery centers. While the issues discussed below arise out of disputes with Aetna, they may very well also arise out of disputes with other insurers.

Restrictions on Right to Refer PPO Patients to Out-of-Network Providers

We believe that Aetna is improperly threatening physicians with rate adjustments or termination of their contracts where the physicians refer PPO patients to out-of-network providers. Attached hereto is an example of one of these letters.

We believe that this practice is improper for several reasons. Aetna markets to its PPO patients, and its PPO patients pay Aetna more for the right to access out-of-network providers. Imposing punitive sanctions on physicians who refer to out-of-network providers will limit the patients’ rights to access out-of-network providers, and therefore negates the benefits of their PPO benefits.

Furthermore, an insurer may not interfere with a patient and physician’s health care treatment decisions, unless the patient has agreed to restricted coverage, like that provided by a HMO.

We also believe that Aetna’s restrictions on referrals may amount to false advertising and unfair business practices, contrary to California and federal law. Finally, the language in the particular contract with Aetna might not actually prohibit referrals to out-of-network providers for members with out-of-network benefits. We encourage you to review Aetna’s payment practices and your contracts to make sure that Aetna is not improperly restricting your out-of-network referrals for members with out-of-network benefits.

Denial of Claims for Facility Charges at Physician-Owned ASCs

Aetna is disallowing claims for facility charges submitted by physician-owned ASCs when those ASCs are not either (1) licensed as freestanding ambulatory surgical facilities in California, or (2) certified as ASCs under 42 C.F.R. § 416. Attached is an example of letters Aetna has sent to physician-owned ASCs. We believe this may be an improper restriction against physician-owned ASCs that do not provide care to Medicare beneficiaries.

As you may know, due to recent changes in California law, physician-owned surgical facilities are no longer eligible for licensure as freestanding ASCs. This makes it impossible currently for physician-owned ASCs located in California to obtain the license purportedly called for by Aetna’s internal policy. California law allows ASCs to operate with either a Medicare certification, or an appropriate accreditation. Naturally, ASCs that do not provide Medicare services have no need to maintain Medicare certification, and many choose the accreditation option. Yet, Aetna is refusing to recognize these accredited ASCs as valid providers. It appears that Aetna hopes to create a de facto coverage exclusion of physician-owned ASCs in California through this policy. We believe that this practice improperly harms physician-owned ASCs, and deprives Aetna’s members of their right to obtain services at these ASCs.

We believe that Aetna’s strategy to exclude California physician-owned ASCs from payment for their claims may be contrary to several provisions of California law. We urge you to review Aetna’s disallowances to make sure that it is not disallowing charges on this basis.

Please click here for a link to examples of the Aetna’s letters.

We are considering filing actions against Aetna on these issues. If you are experiencing these or similar problems with Aetna or any other insurer, or you would like to find out more about these issues, please contact Daron Tooch at (310) 551-8192, Glenn Solomon at (310) 551-8179, or Katie Markowski at (310) 551-8107.

For media inquiries, please contact Barrett McBride at 916.456.5855.