COVID Testing Company Sues Aetna Over Payments

On Monday, Diagnostic Affiliates of Northeast Hou LLC d/b/a 24 Hour Covid RT-PCR Laboratory filed an action in the Southern District of Texas against Aetna-related entities and self-funded employer plans allegedly administered by Aetna. The plaintiff alleges that the defendants have failed to comply with emergency COVID-19-related legislative mandates requiring coverage for COVID testing performed by Plaintiff.

The plaintiff describes itself as a “CLIA certified high complexity laboratory…[that]… has all authorizations and/or approvals necessary to render and be reimbursed for Covid Testing Services. “ Plaintiff alleges that, “At the height of the pandemic, [it] operated seven publicly accessible specimen collection sites [in Texas and Louisiana]” and “partnered and contracted ” with many entities, public and private, in Texas to provide Covid testing services.

Nine of the defendants are Aetna-related entities, collectively referred as “Aetna,” which act as insurer under many types of plans or third party administrator for self-funded plans, “including the Employer Plans that are included as Defendants in this Original Complaint.” The complaint names seventy-six Employer Plans defendants in this category.

Plaintiffs allege that the Families First Corona Virus Response Act (FFCRA) and the Corona Virus Aid, Relief, and Economic Security Act (CARES Act) require “all group heath plans and health insurers …to provide benefits for certain items and services related to diagnostic testing for the detection or diagnosis of COVID-19 without the imposition of cost sharing, prior authorization, or other medical management requirements when such services are furnished on or after March 18, 2020, for the duration of the COVID-19 public health emergency…”

The complaint alleges numerous failures of the Aetna entities to comply with the statutory mandates, including the failure to pay claims as statutorily required, the failure to negotiate with Plaintiff as an out-of-network provider regarding reimbursement rates, the wrongful denial of claims, the demand of payment refunds from Plaintiff and arbitrary denials of claim appeals. The Plaintiff’s focus is on the alleged conduct of the Aetna entities as insurer and administrator. Regarding the seventy-six Employer Plans, Plaintiff alleges that those defendants “have contracted with Aetna to act as their third-party claim’s administrator,” and, “through their silence and inaction, are dually liable for Aetna’s violations of the FFCRA the CARES Act.”

Plaintiff seeks relief under the FFCRA and CARES Act against Defendants and asserts state law Fraud and Promissory Estoppel claims against the Aetna defendants. Plaintiff seeks damages of “no less than $7,090,578.87,” punitive damages, fees and declaratory and injunctive relief.