Aetna sued by Kraft Heinz for allegedly mishandling data
The lawsuit alleges that Aetna took more than $1.3 billion from Kraft Heinz to pay providers.
Photo: Blanchi Costela/Getty Images
An employee benefits group at Kraft Heinz Co. has filed a lawsuit against insurer Aetna, accusing the company of breaching its fiduciary duties by leveraging its status as a third-party claims administrator to benefit itself financially.
The Kraft Heinz group, which represents employees, retirees and dependents, filed the lawsuit last week in a district court in Texas. The lawsuit alleges that Aetna took more than $1.3 billion from the group to pay providers and pursued claims processing practices that harmed the company, while pocketing millions in undisclosed fees.
"Since the beginning of 2012, Aetna has taken more than $1 billion from Kraft Heinz to pay providers for medical services provided to plan participants," the complaint alleged. It accused Aetna of paying millions of dollars in provider claims that should never have been paid and engaging in "claims processing related misconduct" to the detriment of Kraft Heinz.
WHAT'S THE IMPACT?
The lawsuit claimed that Aetna is a fiduciary under the Employee Retirement Insurance Security Act.
"Aetna owes ERISA-imposed fiduciary duties to Kraft Heinz," the suit states. "Its conduct breached those duties. Aetna has engaged in fraud or concealment to prevent and interfere with Kraft Heinz's efforts to investigate and understand Aetna's conduct."
Aetna has served as third-party claims administrator for Kraft Heinz's medical and dental plans for about 16 years. It was in 2021 that the latter suspected there was something amiss, when it attempted to retrieve its claims data and allegedly encountered data that was selected and edited by Aetna. The insurer purportedly provided incomplete medical and dental data that was only relevant to a very specific time frame, the lawsuit said.
Kraft Heinz is seeking reimbursement for losses linked to Aetna's alleged fiduciary breach along with any related profits. The company is also requesting a preliminary injunction to force the insurer to provide more complete claims data.
THE LARGER TREND
CVS Health, which owns Aetna, last found itself in legal trouble last fall, when the company and Walgreens Boots Alliance agreed to pay $10 billion to substantially resolve all opioid lawsuits and claims against the companies.
CVS Health said it agreed to pay approximately $5 billion over the next 10 years beginning this year, emphasizing that the move was not an admission of liability or wrongdoing.
In May, CVS Health projected it will incur up to a $1 billion reduction in net income in 2024 based on the result of the Medicare Advantage Star Ratings. Net income will be affected by $800 million to $1 billion, according to Seeking Alpha.
The percentage of the company's Medicare Advantage members in plans with four or more stars is expected to drop to 21% as compared to 87% based on the 2022 star ratings, CVS said in a filing with the SEC. The main driver of this decrease was a one-star decrease in the company's Aetna National PPO, which dropped from 4.5 to 3.5 stars, while many of the company's other plans remain rated at four or more stars, CVS said.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
