4th Cir. Resurrects Case against Aetna for Using “Dummy” Codes to “Bury” Fees

Class Action alleging that a “Dummy Code” is used to “Bury” fees may result in BURIED TREA$URE for Self-insured employer sponsored group health plan clients of Aetna & OptumHealth.

On June 22, 2021, the 4th U.S. Circuit Court of Appeals reversed a ruling for Aetna and OptumHealth Care Solutions, resuscitating a potential class-action lawsuit alleging that they agreed to use a “dummy code” to bury unbillable administrative fees as billable medical treatment.

This case should serve as an alarm to all Self-insured group health plans, particularly those that give their TPA or carrier authority to pay claims benefits on their behalf because the alleged outrageous behavior by Aetna and OptumHealth raise questions as to whether all their self-insured plan clients may have unknowingly overpaid for certain claims and thus be entitled to significant recovery of Plan Assets.

According to court records:

The record on summary judgment is sufficient to sustain a finding that Aetna circumvented the Plan terms by “burying” the administrative fee it owed Optum in the dummy CPT code claims process.

Allegedly, after treating a patient, the health care provider submitted its claim to Optum for the services rendered. Optum then added a “dummy” CPT code to the claim to reflect a bundled rate fee, consisting of Optum’s administrative fee and the cost of the health care provider’s services. Optum would then forward the bundled rate fee claim to Aetna for its approval. In turn, this bundled rate fee would be paid based on the Plan’s responsibility framework.

In other words, Aetna and Optum allegedly colluded to hide administration fees by disguising them as Medical Service fees.

The court laid the groundwork for employer plan sponsors by opining, “Peters therefore withstood summary judgment on her claims for surcharge, disgorgement, and declaratory and injunctive relief under § 502(a)(1) and (3),

and for her claims on behalf of the Plan for surcharge, disgorgement, and declaratory and injunctive relief—as well as possibly restitution—under § 502(a)(2).”

Case info: Sandra M. Peters v. Aetna Inc., et al Case No.19-2085, US District Court of Appeals Fourth Circuit

The court goes on to say, “A reasonable factfinder could conclude that such action contradicted the obligations Aetna had contracted to fulfill under the terms of the Plan and the MSA,  effectively changing the terms of both without formal amendment of either….[and] that Optum was acting as a party in interest engaged in prohibited transactions” 

The judge went on to determine that “a reasonable factfinder could conclude that Aetna breached its duties based on the following four actions regarding the EOBs: (1) referring to Optum, and not the actual health care provider, as the “provider” of the medical services; (2) using “dummy codes” that did not represent actual medical services; (3)  misrepresenting the “amount billed” as including Optum’s administrative fee; and (4) describing the Optum rate, which included its administrative fee, as the amount that the Plan and its participants…owed for their claim.”

For over a decade, Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. Now with this case and the Supreme Court’s guidance on ERISA anti-fraud protection, we are ready to assist all medical providers and self-insured plans recover billions of dollars on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs click here.

AVYM Leads The Way- NJ State Legislature Passes Nation’s First Third-Party Auditor Bill Into Law

Originally Published by By ROI-NJ, By Anjalee Khemlani; Trenton | Jul 1, 2019 at 10:00 am : http://www.roi-nj.com/2019/07/01/healthcare/third-party-auditor-bill-signed-into-law-despite-insurers-opposition/

Third-party auditor bill signed into law

A bill that some insurers lobbied quietly to quash made its way through the Legislature and was signed by Gov. Phil Murphy on Sunday.

The bill calls for a third-party auditor to real-time audit the State Health Benefits Plan and School Employees Health Benefits Plan.

It was first introduced in October 2018 by state Sen. Paul Sarlo (D-Wood-Ridge), and came from a report commissioned by a New Jersey doctor that alleged

health insurers were skimming off the top of claims payments for the SHBP and SEHBP.

The report was published by California-based AVYM.

ROI-NJ previously reported that the state’s contracts with Aetna and Horizon Blue Cross Blue Shield of New Jersey are set to expire this year, allowing a revamp of the Request for Proposal process and changing the type of contracts the state has with insurers who administer the state plans.

The Office of Legislative Services said in its fiscal analysis of the bill that it could not put a specific savings amount from the audited claims, even though

the AVYM report alleges savings of more than $1 million to the state.

“Hiring a third-party medical claims reviewer to provide regular, frequent and ongoing review and oversight of the claims process, which process includes, but is not limited to, the receipt, management, adjudication and payment of claims, serves the best interests of the state, participating employers and the thousands of employees and their dependents covered under the (SHBP and SEHBP),” according to the legislation.

The goal is to have a medical claims reviewer hired in time to review claims from plans that will be in effect in January 2020.

Majority of Americans believe Healthcare Reform should be expanded or kept as is, according to new poll.

Public opinion appears to be moving in favor of President Obama’s Healthcare Reform Act, PPACA.  A new poll by the Kaiser Family Foundation shows that a majority of the public opposes repealing the entire law, which includes popular provisions such as allowing children to stay on their parents’ health insurance until age 26 and prohibiting insurance companies from discriminating against people with pre-existing conditions.  The Kaiser survey found that 54 percent of respondents believe the law should be expanded or kept as is, while 37 percent want it repealed completely.

“In terms of next steps for the ACA, just over a third of Americans would like to see it expanded (35 percent, the highest point in Kaiser tracking), two in ten (19 percent) want to leave it in its current form, and similar shares would like to replace it with a Republican alternative (18 percent) or repeal it outright (19 percent).”

There are some interesting results in the latest Kaiser Family Foundation poll, among them:

  • 63 percent of Americans support a new federal requirement that plans include no-cost birth control
  • Americans that think their family will be worse off under health reform dropped to 25 percent
  • 70 percent of Americans say “Medicare should continue as it is today, with the government guaranteeing seniors health insurance and making sure that everyone gets the same defined set of benefits,

Interestingly, in regards to the budget and cost controls, the poll found that “despite the fact that many policy experts are deeply focused on the need to rein in the nation’s entitlement spending, the survey confirms the conventional wisdom that convincing a majority of the public to make any change to Medicare is going to be difficult”

Kaiser Health Tracking Poll-Feb-2012