Aetna Class Action-Aetna Sued for Overpayment Offsets in Violation of ERISA and for “Illegal Self Help” Designed to Circumvent ERISA

Aetna Class Action-Aetna Sued for Overpayment Offsets in Violation of ERISA and for “Illegal Self Help” Designed to Circumvent ERISA

On October 24, 2014, Aetna was slapped with a new provider class-action lawsuit alleging ERISA violations and fraud for its overpayment recoupment and offset practice. The suit also alleges Aetna engaged in withholding or offsetting new payments from providers as part of an “enterprise level” scheme of “illegally” withholding payments for covered services.

Case Info: MAYER-et-al-v.-AETNA-INC.-et-al U.S. District Court for the Central District of CA Civil Docket For Case #: 2:14-cv-08266, Filed 10/24/14.

This class action comes on the heels of another overpayment provider class action lawsuit filed against United Healthcare (UHC) on June 23, 2014. In that case, the overpayment recoupment and offset practices of UHC are alleged to be in violation of ERISA and fiduciary fraud. Avym’s support services were instrumental in allowing multiple plaintiffs the chance to fight back.

Overpayment offset and recoupments continue to be the Healthcare provider industry’s No. 1 claim denial as evidenced by UHC’s own admission that it had recovered $430 million worth of overpayments in 2011 alone. Correspondingly, for self-insured health plans, the No. 1 hidden cost is overpayment recoupment and possible plan assets embezzlement. In another recent case that intertwines ERISA violations and hidden fees, the U.S. Supreme Court rejected an appeal by BCBSMI of a lower court’s ruling which awarded a self-insured ERISA health plan a $6.1 million fraud judgment. The immediate impact of all these cases could be billions of dollars for all self-insured ERISA health plans nationwide, as a result of the ASO/TPA industry’s potential recovery of a billion dollars in overpayment recoupments and anti-fraud campaigns over the past 10 years.

This Aetna case illustrates the need for all employer sponsored health plans to comply with federal ERISA regulations when making demands for overpayment refunds. Attempts to recoup or withhold monies from providers are and should be treated as any other claim denials.  Additionally, Providers need to level the playing field by ensuring they submit ERISA/PPACA compliant appeals which properly request due process and a full and fair review.

According to the lawsuit,

  • Aetna has been withholding or offsetting new payments in part or in whole from providers from one patient to satisfy another alleged overpayment in the past from other unidentified and completely separate patients in violation of ERISA;
  • Aetna then misleads patients and the plan sponsors as to payments made to the providers by claiming that a “payment” had been “issued” when in fact it was not paid;
  • Aetna has never complied with ERISA claims regulation when requesting alleged overpayments and offsetting new payments from other patients.

The putative class on behalf of all similarly situated providers is seeking for ERISA benefits payments due, injunctive and declaratory relief. The provider class action also alleges additional ERISA violations by Aetna for withholding and offsetting newly adjudicated claim payments from one patient to satisfy another alleged overpayment in the past from other unidentified patients which in some cases are members of a completely separate plan, in violation of ERISA.

The complaint also alleges that Aetna misled patients and the plan sponsors on patient EOB’s that indicated “payment” had been “issued”, when in truth and in fact no such payment was ever made to the providers, according to the Court Complaint.

In particular, the complaint alleged the following:

“Aetna is engaged in an enterprise-level scheme whereby it illegally withheld such payments. It did so in order to offset what it believes to be prior overpayments to Plaintiffs made by different Aetna Plans relating to services provided to different Aetna Insureds. It has done so without any legal authority under the Aetna Plan or otherwise, and leaves the Aetna Insureds financially responsible for unpaid bills for Covered Services that their respective Aetna Plans are obligated to pay”

The complaint goes on to allege that:

Instead of availing itself of lawful means of recovering such overpayments under ERISA, Aetna instead engages in illegal self-help designed to circumvent the ERISA regulatory regime. Neither the Aetna Insureds, their ONET providers, nor the language of the Aetna Plans granted Aetna the rights to recover alleged overpayments in this manner”.  The Plaintiffs also allege that Aetna “did not provide any of the informational items or appellate procedures mandated by the ERISA Claims Procedure.”

As more and more of these cases make their way through the courts, it is clear that the previously questionable or “legal gray area” of overpayment recoupment practices engaged in by many of the nation’s biggest insurance carriers, effectively trigger ERISA appeal rights.  Insurers and Health Plans will be forced to comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar. Providers or patients that face Aetna or any payor recoupments or offsets would do well to understand the implications of these lawsuits as well as their rights under ERISA.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support services.




Sam Cozzo

Would like to know more about going after provider overpayments under Erisa


This lawsuit made absolutely no difference. AETNA continues doing this even though they know it to be illegal. I have fought this for almost three years. They totally ignore ERISA. I think they have deep pockets and don’t care. It will take jail time – fines have no impact.


    And Ms. FRANKLIN is absolutely correct.
    What is the point of lawsuit if they continue to conduct illegal business practices. Both Aetna and Cigna continue to violate ERISA. Employers need to evaluate TPA process


I have been trying to keep up with this lawsuit and everytime I go on the Internet there is something else to do or someone else to contact. I just want justice.

I want the game to end and I want a payoff. And aetna will never be a provider for me again.

    Phyliss SHEPPARD

    Where is my payoff monies. The lawyers get paid, but not the constituents whom paid the extra money out to Atena. It is always the FATCATS THAT REAP THE BENEFITS. I want what is due to me and my family. This reply is written in 2019. The payoff was 2014.


These comments are the truth! Aetna continues to disrupt businesses and facilities with automatically enforced overpayment requests without providing patients or facilities full and fair review or appeal rights. When told to put an injunction on the forcible recoupment of future payments until the finalization of the appeal, they have no idea what to do! This is unjust and The Dept. of Labor should not allow this to continue. I agree that some jail time should be issued. They are basically corporate gangsters.

Lawrence Parsons

I need to go after Aetna *bad faith cliam* (Erisa) I would like someone to help us and only have a year left and I have been looking for some help. In process we a probate attorney and he knows the facts and he can only help so far so I am the one doing the work to find who cares read the proof n facts and go from there.

Anyone out there to help

Lawrence Parsons


    Hello Lawrence, Your correct it is hard to figure out the processes and DOL along with ERISA provides little to no assistance with the enforcement of their very own regulations. As an auditor, I have found that it works best when we go directly after both ERISA and DOL along with EBSA. Holding them to the fire works best. The other avenue is to hold the employers personally responsible as they are ultimately the responsible party. It helps if they get involved in these situations.

Deborah Hill

I need information on filing a lawsuit against re: rejection of flex spending monies and Employment discrimination.

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