On Tuesday a case was filed in the District of New Jersey as a class action against Aetna Inc. and Aetna Life Insurance Company. The concerns the processing of out of network claims for ERISA plans administrated by Aetna.
Insurance companies frequently negotiate with medical facilities and doctors to receive a discounted rate for medical bills in exchange for guaranteeing a certain amount of business. However, medical facilities and doctors are not required to accept a contract. Out of network providers have no such contract.
Out of network charges are often paid out by the insurer at a usual and customary rate, based off of what is typically billed in the region. The parties can also negotiate for a payment rate specifically regarding that particular service. However, sometimes an insurance company tries to pay a claim at a lower rate than those in the three methods noted above, which may not be appropriate based off of the insured’s contract. This last option frequently results in balance billing, where the patient is liable for the remaining amount between what the insurance company paid and what the provider billed.
The plaintiffs, all members of ERISA plans, all had clauses in their insurance plans descriptions stating that Aetna would negotiate with out of network providers to ensure that the patients would not be balance billed. The patients all received involuntary out of network treatment when their procedures were performed at an in network medical facility, but the surgeons were out of network. Aetna did not use any of the three approved methods in the plan documents and instead chose to pay the services at 105% of the Medicare payment rate, which the providers rejected as insufficient payment. However the plaintiffs accuse Aetna of failing to negotiate in good faith, resulting in outstanding balance billing amounts in the ranges of hundreds of thousands of dollars.