Aetna drops lawsuit against Mednax

Health insurance giant Aetna voluntarily dismissed its overbilling lawsuit against medical group Mednax on July 14, ending the legal process it initiated in 2018.

The suit alleged that Mednax, based in Sunrise, Florida, racked up more than $50 million in improper payments as a result of unnecessary neonatal testing.

In the lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania, Aetna accused Mednax of amplifying the concerns around neonatal clinical conditions, using them to order unnecessary tests and thus inflate medical bills, in a process known as upcoding.

Upcoding is when a provider assigns an inaccurate billing code to a medical procedure or treatment to increase reimbursement.

Aetna complained Mednax routinely listed codes that exaggerated the care needed and performed "by designating infants as being sicker than they truly were so that it appeared as if the infants required more intensive treatment than was truly the case."

As alleged by Aetna, this upcoding scheme permeated Mednax's operations, with Mednax training and requiring physicians to engage in upcoding and encouraging them to perform unnecessary services to support higher billing rates.

Further, the suit alleged Mednax would sometimes inflate the codes itself, above the level indicated by physicians, before submitting the forms to Aetna.
 
Mednax had previously tried to have the case dismissed on grounds that it fell outside of the two-year statute of limitations. That motion to dismiss was rejected in 2018.

In March, Aetna had further alleged Mednax of destroying evidence in the $50 million overbilling suit by deleting hundreds of thousands of emails sent over several years.

WHY THIS MATTERS

The voluntary dismissal of the case brings an end to the three-year legal process which took several turns following the initial lawsuit, where Aetna analyzed "tens of thousands of claims," and concluded that Mednax claims exceeded those of other highly-ranked physician groups by more than 18%.

The case took several twists and turns, with Mednax disputes the charges leveled in Aetna's motion, even as U.S. District Judge Wendy Beetlestone denied Mednax's motion to dismiss Aetna's claims. Beetlestone later barred Aetna from seeking alleged hospital overpayments linked to Mednax billing, according to court documents.

THE LARGER TREND

Overbilling through upcoding is just one of many types of fraudulent billing practices plaguing the healthcare industry. The Centers for Medicare and Medicaid Services offers a Medicare Fraud & Abuse handbook on prevention, detection and reporting of overbilling.

A 2018 study from ProPublica examining overbilling and overcoding found the problem persists, despite efforts from federal regulators to more closely scrutinize the problem.

Federal laws governing Medicare fraud and abuse include the False Claims Act and other statutes, which are enforced by several government agencies, including the U.S. Department of Justice, the U.S. Department of Health & Human Services, the HHS Office of Inspector General and the CMS.
 
ON THE RECORD
 
"We are pleased that CVS Aetna has voluntarily dismissed the lawsuit that it filed against us in 2018, putting this matter fully in the past," Mednax CEO Mark Ordan said in a statement. "Our core mission is to do what's absolutely best for our patients: mothers and children at their most vulnerable times. CVS Aetna's website speaks the same language about care, so we hope this can be a start of building a positive relationship for the sake of our patients."
 
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Email the writer: nathaneddy@gmail.com