California doctors sue Aetna for coverage denials

Tue Jul 3, 2012 5:14pm EDT

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(Reuters) - Thousands of doctors in California are suing the health insurance company Aetna Inc claiming the company routinely denies patients access to out-of-network doctors even when the patient has purchased a policy giving them the right to choose providers.

The lawsuit, filed in the Los Angeles County Superior Court, accuses Aetna of threatening patients with denial of coverage if their members visit doctors outside the Aetna network of providers, and of threatening doctors with having their Aetna contracts terminated if they refer patients outside the network.

The lawsuit was brought by the Los Angeles County Medical Association, California Medical Association and a coalition of health care organizations and providers.

Aetna claims the suit is in retaliation for a suit filed by Aetna in February claiming several California providers, including Bay Area Surgical Management (BASM)and seven ancillary facilities, sent Aetna members to BASM without revealing that physicians had an ownership interest in the facility or were getting paid by BASM for their referrals.

"We have sued some of these same doctors and surgery centers named in the suit for their egregious billing practices in February of this year," Cynthia Michener, a spokeswoman for Aetna, said in an email. "This is a countersuit disguised as a class action lawsuit."

Michener said Aetna would "continue to pursue medical providers whose charges are so grossly out of line."

She cited as examples facilities and doctors who have charged $73,536 for a kidney stone fragmentation when an average in-network charge would be around $7,612. Or those that have charged $37,572 for a knee procedure that would cost about $10,500 with an in-network physician.

Michener was not immediately able to say what the average cost of these procedures would have been in out-of-network facilities that are not being sued by Aetna.

The lawsuit brought by the physicians accuses Aetna of false advertising, breach of contract, unfair business practices, and both intentional and negligent interference with healthcare providers.

The lawsuit seeks an end to the practices, an immediate injunction, compensation for patients and physicians and punitive damages.

"Despite making tens of millions of dollars selling policies with out-of-network benefits, Aetna has engaged in a campaign to retaliate against its members who attempt to use their out-of-network benefits, and the physicians who refer these members to out-of-network providers," the lawsuit states.

(Reporting By Toni Clarke)

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