Rocky Delgadillo, CEO of the Los Angeles County Medical Assn., announces… (Al Seib, Los Angeles Times )
The California Medical Assn., the largest physician group in the state, and more than 60 individual doctors sued health insurance giant Aetna Inc. as part of a growing legal battle over what patients are charged when they go outside an insurer's network.
Three county medical groups, four surgery centers and an unidentified patient joined them in filing suit in Los Angeles County Superior Court against Aetna, the nation's third-largest health insurer with about 18 million members nationwide. The suit alleges that the insurer illegally threatens doctors and patients who want to use out-of-network medical providers and then cancels the contracts of some physicians who persist in those referrals.
"This lawsuit is about defending patient rights to quality care, which Aetna is ignoring," said Francisco J. Silva, general counsel at the California Medical Assn., which represents more than 35,000 physicians statewide.
The doctors are seeking an injunction against Aetna's actions and reinstatement of physicians who they allege were unfairly terminated from the company's network. The plaintiffs in the case said the insurer touts the flexibility of seeing out-of-network doctors and facilities in these preferred-provider organization plans and similar policies.
It can be an expensive proposition for patients who seek care outside the discounted rates their insurer has negotiated with doctors and hospitals. Insurers often pay only a fraction of what those providers charge and sometimes patients are stuck with bills for thousands of dollars left unpaid by their health plan.
Aetna has been aggressive in recent months at suing doctors and surgery centers that they own in California, Texas and New Jersey for allegedly overbilling insured patients who go outside the company's network. In February, Aetna filed suit against Bay Area Surgical Management and several affiliated physicians and surgery centers in Northern California and accused them of overcharging the insurer by $20 million in the last two years.
Bay Area Surgical Management has denied Aetna's claims and called them "baseless."
The Hartford, Conn., insurance company said this latest case is essentially a countersuit brought by some of those same doctors. Bay Area Surgical Management and some of its surgery centers are among the plaintiffs in the case filed against Aetna on Tuesday in Los Angeles.
An Aetna spokeswoman said doctors are referring people to out-of-network facilities that they own — without informing patients about this conflict of interest.
"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," said Anjie Coplin, a spokeswoman for Aetna.
For instance, the insurer said, one surgery center charged $37,572 for an arthroscopic knee surgery when the average in-network fee was about $10,500.
Rocky Delgadillo, chief executive of the Los Angeles County Medical Assn. and former Los Angeles city attorney, said the lawsuit filed Tuesday is separate from other litigation because it involves doctors statewide. He said physicians who have ownership interests in surgery centers and other medical facilities comply with state law and disclose that information to patients.
"Aetna is putting profits ahead of patients' health and safety," Delgadillo said, flanked by oversized copies of letters that Aetna has sent recently to California doctors threatening to terminate their network contracts over these patient referrals. "I hope Aetna sees the light and stops these actions."
Experts say patients may get caught up in more of these disputes as insurers and medical providers face increased pressure from employers and from some provisions of the federal healthcare law to cut costs. Insurers have been forming smaller networks of lower-cost doctors and hospitals to offer workers and consumers cheaper premiums, albeit with less choice.
"These contract dispute tensions will intensify in the next few years as the new Affordable Care Act regulations force insurers to keep a tighter rein on their networks," said Shana Alex Lavarreda, director of health insurance studies at the UCLA Center for Health Policy Research. "Consumers could be affected by increased network disruptions."