Aetna Wins $41 Million in Lawsuit Against Provider for Paying Kickbacks to Physicians

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The following article is about a recent lawsuit in which Aetna won $41
million against a provider for paying kickbacks to physicians. Feel free to
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Elizabeth E. Hogue, Esq.

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Aetna Wins $41 Million in Lawsuit Against Provider for Paying Kickbacks to

In Aetna Life Insurance Company v. Humble Surgical Hospital, Civil Action
H-12-1206, U. S. District Court, S.D. Texas, decided on December 31, 2016,
Aetna won a lawsuit against a Texas hospital, Humble Surgical Hospital,
based on kickbacks paid by the hospital to referring physicians. This
decision shines a spotlight on the fact that providers, including private
duty agencies, that receive payments from insurers, even if they don't
receive payments from the Medicare/Medicaid Programs, may have liability for
the payment of kickbacks. Likewise, agencies that do receive reimbursement
from federal and/or state health care programs should be wary of "carving
out" other payors to engage in conduct that is otherwise prohibited.

Humble did not have a contract with Aetna, so Humble was paid considerably
more than hospitals that were in Aetna's network. Humble paid referral fees
to doctors and waived patients' charges in order to help insure a steady
stream of referrals, since they were out-of-network.

In fact, Humble provided referring physicians with written proposals
offering them 30% of facility fees it collected from Aetna in exchange for
referrals. The doctors paid Humble $3,500 per year in "administrative and
investment fees" to be entitled to receive these kickbacks. Physicians
received payments through shell companies that they established.

Humble certified that each claim was "true, accurate, and complete."

The Court determined that shell companies established by physicians for
receipt of payments from Aetna could not legally receive such payments
because they were not licensed. In addition, there were no assignments from
patients to the shell companies and no assignments from the shells to

Here is what the Court said about this arrangement: "Humble has no
defense..Aetna's hands are clean. Humble is filthy up to the elbows from
lies and corrupt bargains."

The Court went on to say that:

.From the beginning Humble has been recalcitrant and obstreperous. Through
six sets of lawyers, countless orders, hearings and conferences, Humble's
behavior has ranged from openly defiant to evasive - always feigning
compliance. The court has admonished Humble time and time again.This case
has had a tortured existence, and the bulk of the activity has been trying
to force Humble to tell the truth. Humble has conducted guerrilla warfare
against this court, Aetna, the patients and common decency.

The Court concluded that Aetna could take, at its election, one of the
following from Humble:

- $41,411,650.98 - the amount Aetna paid Humble from August, 2010,
through October, 2013

- $20,248,259.65 - the difference between what Aetna paid Humble as
an out-of-network provider from August 2, 2010, to May 11, 2012, and what it
would have paid Humble as an in network provider

- $12,423,295.29 - the thirty percent (30%) kickbacks paid by Humble
with Aetna's money

Just imagine which option Aetna chose!

The "bottom line" is that providers that obtain patients through illegal
remuneration to them or their doctors may not be paid under insurance plans.
In short, the rules prohibiting kickbacks extend far beyond the Medicare and
Medicaid Programs and other state and federal healthcare programs.

C2017 Elizabeth E. Hogue, Esq. All rights reserved.

No portion of this material may be reproduced in any form without the
advance written permission of the author.


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