Aetna has been in the news quite a bit lately and it seems the insurance giant can’t get out of its own way. On August 25, 2020, the California Department of Managed Health Care (DMHC) ordered Aetna to stop improperly denying emergency claims and fined Aetna $500,000 for repeatedly failing to correct the problem after a sampling of claims from 2019 found it had denied 93% that it deemed unnecessary.
According to the DMHC’s recent press release:
The California Department of Managed Health Care [DMHC] has ordered Aetna Health of California, Inc. to stop using the plan’s national standard to deny payment for emergency room claims. This practice has resulted in Aetna wrongfully denying members’ emergency room claims as the plan should be applying California’s broader standard to approve emergency room services.
The Department has also fined Aetna $500,000 for repeatedly failing to apply California law and failing to implement corrective actions to correct this problem. Aetna has repeatedly agreed to follow California’s standard for reimbursing emergency room claims but has continued to use its national standard, resulting in many wrongful denials of emergency room claims. California law requires a health plan to pay for emergency medical services unless it is in possession of evidence to show that either the emergency medical services were never performed or the enrollee did not require emergency medical services and reasonably should have known that an emergency did not exist.
The Department has previously taken enforcement action against Aetna for improperly denying coverage for enrollees’ emergency medical services. Aetna entered into settlement agreements with the DMHC in 2015 and 2016 and paid $135,000 in fines. Aetna also agreed to Corrective Action Plans requiring training for employees handling claims for emergency services and reimbursement for emergency services based on the California standard.
Despite the enforcement actions taken against the plan to correct its deficiencies, the DMHC Help Center received four complaints in 2018 and 2019 showing that the plan had wrongfully denied emergency room claims based on the incorrect standard. The DMHC then conducted a medical survey of the plan’s operations and reviewed a sample of the plan’s denials of emergency medical services.
The Department also reviewed Aetna’s commercial emergency medical services denial template for HMOs and determined that the templates did not follow California law. If a health plan denies payment for emergency services, enrollees should file a grievance with their health plan and include a copy of the bill. Their health plan will review the grievance and should ensure the plan is following the California standard. If the consumer does not agree with their health plan’s response or if the plan takes more than 30 days to fix the problem, they can file a complaint with the DMHC Help Center at www.HealthHelp.ca.gov or 1-888-466-2219.
This is not the first time Aetna has run into problems for questionable practices. In 2018, then Aetna Medical Director, Iinuma Jay Ken MD, admitted under oath, he never looked at patients’ records when deciding whether to approve or deny care. This revelation prompted then California Insurance Commissioner Dave Jones, to launch an investigation into Aetna’s practices.
During his videotaped deposition in October 2016, Iinuma — who signed the pre-authorization denial — said he never read Washington’s medical records and knew next to nothing about his disorder. He further said he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient. “Do I know what happens?” the doctor said. “Again, I’m not sure. … I don’t treat it.”
Just months after Aetna’s then medical director admitted he denied coverage for treatments without ever bothering to look at the patients’ medical records, an Oklahoma jury slammed Aetna with a stunning $25.5 Million verdict for recklessly denying medical coverage for proton beam therapy. The jury awarded the family of the deceased patient $15.5 million in emotional distress and another $10 million in punitive damages after denying proton beam therapy to Aetna policyholder Orrana Cunningham as being “investigational” or “experimental,” despite years of research and hundreds of medical experts who say otherwise.
The case details are very common and happen everyday across the nation: Patient pays for health insurance, patient gets sick and seeks treatment, insurer denies claim under the guise that services are deemed experimental or investigational.
According to the family’s attorney, Doug Terry,
“[this] case represents/exposes so much of what is wrong with health insurance,…This case gave the jury a look behind the curtain so they could see what goes on at a health insurance company when they deny claims. The evidence showed Aetna’s denial of her claim involved overworked, under-qualified doctors working in the interest of their employer’s bottom line who are compensated in part based on the profitability of the company.”
Aetna was acquired by CVS Health in 2018. The subsequent jump in CVS Health’s profits of more than 50% has been partly attributed to the fact that elective procedures Aetna health plan pays for were postponed or delayed amid the spread of the Coronavirus strain Covid-19. CVS Health’s net income soared 54% to $2.9 billion in the second quarter compared to $1.9 billion in the year-ago period, the company said in its earnings report issued Wednesday. It is not immediately clear if the emergency room denials have significantly contributed to earnings.
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