CVS-owned insurer Aetna sues Radiology Partners alleging multiphase ‘fraud scheme’
CVS-owned Health insurer Aetna is suing Radiology Partners alleging the country’s largest imaging group executed a “multiphase healthcare fraud scheme” in one state.
The Hartford, Connecticut-based payer filed the complaint Dec. 23 in Florida Middle District Court, with the alleged actions defrauding Aetna of “tens of millions.” Aetna charges that Rad Partners has acquired or affiliated with at least nine practices in the Sunshine State since RP’s founding in 2012.
In “Phase 1 of the scheme,” the radiology group allegedly identified affiliate practice Mori, Bean and Brooks as having one of the highest in-network commercial payer contracts in Florida. Rad Partners purportedly would use MBB’s name and tax ID number to bill Aetna for work performed by other rads outside of MBB, targeting the more lucrative contract amount to pad profits in the state.
“Through this fraud, defendants caused Aetna and its plan sponsors to pay significantly more for the same services provided by the same physicians at the same hospitals,” attorneys wrote in the complaint. “This was a purely profit-driven scheme and, upon information and belief, motivated by Radiology Partners’ greed and desire to gin up additional revenue to satisfy the demands of its private equity owners.”
The complaint mirrors similar allegations leveled by UnitedHealthcare’s Texas affiliate in 2023. At the time, the country’s largest commercial insurer charged that RP had executed a “pass through billing scheme” using the more lucrative contract held by its Singleton Associates affiliate in Houston. RP would purportedly use radiologists from across its vast enterprise of over 3,000 physicians to bill using the Singleton Associates contract. The California court dispute has remained dormant for more than a year, while a longer-running and related Texas reimbursement disagreement ended in August with arbitrators vacating a $134 million judgment previously awarded to Rad Partners.
In a statement shared Thursday, El Segundo, California-based Rad Partners called the latest lawsuit “unexpected.” Mori, Bean and Brooks has remained out of network with Aetna for over two years since Aetna terminated its 20-year agreement with MBB in July 2022. Rad Partners acquired the Jacksonville radiology group in September 2018 for over $130 million.
“RP and MBB strongly dispute Aetna’s allegations and stands by the integrity of its owned and affiliated practices, which comply with all applicable healthcare laws and regulations and ordinary business practices,” a spokesman told Radiology Business.
Allegations tied to No Surprises Act
By 2022, Aetna charges that MBB was submitting “significantly more” claims to the insurance company because of Rad Partners’ alleged “scheme.” When asked about this uptick, RP purportedly deflected Aetna’s inquiries, forcing the insurer to terminate its contract with the practice.
Aetna claims this led to Phase 2 of the alleged scheme. After knocking Mori, Bean and Brooks out of network, RP allegedly continued billing through MBB, rather than “properly” using its other Florida practices’ contracts with Aetna, which remained in network. Rad Partners purportedly then initiated “tens of thousands” of arbitration disputes with Aetna under the No Surprises Act. The landmark law allows out-of-network healthcare providers to seek the expertise of independent arbitrators to settle disputes over payment. However, Aetna emphasized that these other RP groups were still in-network with the health plan.
“These arbitrations were all initiated based on [Radiology Partners’] misrepresentations that they were for medical services provided by MBB,” the complaint states. “In truth, they were for medical services provided by other medical groups who had contracts with Aetna, rendering those services ineligible for arbitration under the NSA.”
Aetna charges that, in doing so, Rad Partners provided false information to arbitrators and the U.S. Department of Health and Human Services. RP allegedly did so knowing that Aetna did not have information to identify whether the services were provided by MBB. The payer estimates that Rad Partners batch-filed “thousands of claims simultaneously to overwhelm Aetna and inhibit its ability to respond.”
“The scope of defendants’ scheme is staggering,” the complaint claims. “As scholars studying [No Surprises Act independent dispute resolution] data recently noticed, Radiology Partners and three other private-equity- backed provider groups have accounted for ‘a large and disproportionate share of IDR cases,’” Aetna added, referring to a March 2024 report from Brookings (TeamHealth and Envision Healthcare were the other two). “In fact, Radiology Partners is responsible for over 90% of all IDR cases involving claims for professional radiology services.”
Rad Partners, meanwhile, contends that the lawsuit reflects Aetna’s “terrible track record” for reimbursing practices under the No Surprises Act. Mori, Bean and Brooks has scored a 98% win rate under the NSA. This “overwhelmingly clear trend” indicates that Aetna “uniformly fails to fairly compensate providers,” RP fired back.
“Meanwhile, rather than negotiate a contract to return to in-network status that would save its employers and members money, Aetna has been seemingly happy to pass along those costs, including the enormous fee burden of the NSA process,” a Rad Partners spokesman said. “We view this as an embarrassing waste of healthcare resources and would much prefer to be in network with Aetna, as we are with the vast majority of payers. We have communicated this to Aetna countless times over the last two years.”
Aetna and its attorneys at Robins Kaplan LLP—the same law firm that represented UnitedHealthcare in the failed 2023 lawsuit—did not immediately respond to a request for further comment Thursday. The health insurer—acquired by pharmacy chain CVS in 2018 for $69 billion—is seeking an unspecified figure likely in the “tens of millions,” to be awarded via a jury trial. This would include compensatory and punitive damages, costs, attorney fees and prejudgment interest.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.