Aetna Sues N.J. Surgical Center For $10 Million, Alleges Overbilling Scheme

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Aetna is suing an ambulatory surgical center in Englewood, N.J., for $10 million to recoup losses in an alleged scheme to overcharge the insurer while allowing patients to forgo copays and other out-of-pocket expenses.

Doctors with a financial interest in Patient Care Associates LLC allegedly referred patients to the surgical center for procedures ranging from knee replacements to injections for neck sprains, lawyers for Aetna wrote in a lawsuit filed May 20 in U.S. District Court in New Jersey.

Aetna accuses Patient Care Associates of a scheme to defraud the insurer through a pattern of false, misleading and fraudulent insurance claims in violation of New Jersey law.

The surgical center allegedly waived patients’ portion of medical bills, such as co-pays and costs not covered by Aetna, according to the insurer’s legal complaint. Instead, the complaint says, Patient Care Associates billed Aetna at rates that were as much as 374 times the standard Medicare reimbursement rate for a procedure.

Private insurers such as Aetna typically pay more than the Medicare rate for procedures, but generally private insurers aren’t paying even double the Medicare rate.

In one example Aetna cited, the federal government will reimburse a surgical center $86.80Ö to remove a portion of skin, and Patient Care Associates billed Aetna $32,460Ö for the same procedure, according to the lawsuit.

Aetna alleges that Patient Care Associates submitted 2,774 claims totaling $9.9 million from Jan. 5, 2010, through June 20, 2012. The insurer is asking the court to have Patient Care Associates pay damages of $10 million.

Agreements between Aetna and hospitals or doctors groups allow the health insurer to deliver health care benefits efficiently through a network of medical providers, and to anticipate and control the cost of care, lawyers for Aetna wrote in the lawsuit.

Out-of-network doctors and medical providers are those who don’t have contracts with Aetna. When a patient goes to an out-of-network medical provider, the patient ends up getting billed for the remaining cost of a procedure that isn’t covered by the insurer. Typically, it’s more expensive for patients to pay out-of-pocket expenses to an out-of-network medical provider than to an in-network provider.

Aetna declined to provide additional comment beyond the legal complaint. Patient Care Associates deferred comment to its attorney, who could not be reached Thursday.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by Politico.com, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (businessjournalism.org, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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