The Aetna Health insurance company sued a large radiology company recently, accusing it of defrauding Aetna and health plan sponsors out of tens of millions of dollars in Florida.
Aetna says the company, Radiology Partners, affiliated itself with a number of radiology groups in Florida, using a process that looks like an acquisition but leaves the groups in charge of their own practices. Then Radiology Partners identified a practice with a particularly advantageous contract, and then billed for other practices under those contract rates, the suit says.
The suit is important because it reveals the inner workings of the healthcare industry, and shows how providers try to get around insurance company payment rules. The suit, Aetna Health v. Radiology Partners, was filed on December 23, 2024, in Florida.
“RP identified a provider with a particularly attractive in-network contract — Mori, Brooks, and Bean (MBB) — and began billing for claims for other providers under the MBB contract with Aetna,” Health Tech Nerds wrote, describing the case. “After several years, Aetna discovered it was overpaying providers by millions of dollars under its contract with MBB as opposed to the contract terms with the other practices, as MBB went from billing for ~50 providers in its practice to over 1,000 providers after affiliating with RP. Aetna subsequently terminated the contract with MBB, leaving the in-network contracts with other RP practices in place.
“After Aetna terminated its MBB contract in 2022 leaving MBB as an out-of-network provider, RP began flooding a process created by the No Surprises Act (NSA) to resolve disputes between payors and providers over payment for out-of-network services. Aetna suggests that RP is abusing this process because the radiology providers at practices other than MBB still have in-network contracts with Aetna, and so those claims should be submitted via those in-network contracts.”
No Surprises Act
Radiology Partners disputed the accusations in a statement that shed some further light on the No Surprises Act attempts to recoup payments, in which RP says it has been very successful.
“Aetna’s actions appear to reflect a broader response to its terrible track record for reimbursing medical practices under the federal No Surprises Act (NSA). Aetna’s complaint failed to mention that MBB has a 98% win rate through NSA arbitration, which is determined by independent, third-party arbiters reviewing underpaid, out-of-network claims from Aetna.
“This overwhelmingly clear trend indicates neutral third parties applying federal law conclude Aetna uniformly fails to fairly compensate providers who support patient care. As the only available avenue when a provider is forced out of network by Aetna, MBB turned to the NSA arbitration process for relief when the payor underpaid for services MBB had rendered to its members.
“This lawsuit exemplifies a conscious strategy by Aetna to leverage legal disputes rather than seek a fair resolution. Aetna does not want to negotiate, does not want to pay when it loses disputes in the NSA arbitration process. It does, however, want a judge to say it does not have to pay its bills from already-decided disputes and is seemingly content to burden employers and ultimately members through higher premiums with unnecessary and extraordinary costs of NSA arbitration.”
We wrote about the NSA arbitration process here. Basically, while the settlement process between insurers and providers seems by and large to be working as intended to protect patients, evidence is mounting that some parts of the settlement process are badly broken — “in a shambles,” one expert said.
Private equity
Radiology Partners, founded in 2012, is backed by “private equity firm Whistler Capital (31.6% ownership stake as of November 2023) — alongside venture capital firm New Enterprise Associates (19.6%) and the Australian sovereign wealth Future Fund (10%),” Radiology Business wrote in September 2023.
In February 2024, the company closed a growth equity investment of approximately $720 million. The financial arrangements also included “’meaningfully’ reducing the company’s debt load and successfully pushing back maturity dates to between 2028 and 2030,” Radiology Business reported.
It serves more than 3,300 hospitals and other healthcare facilities across the nation, and describes itself as a physician-led and physician-owned practice, but the robust private equity ownership means that it is less a doctor-owned business than a private equity- and venture-backed company.
Reducing prices
It is worth noting that the NSA was initially conceived of as a way to reduce healthcare prices, by making it illegal for a doctor, hospital or other provider to receive an insurer’s payment and then send a balance bill to the patient for what was unpaid. Now, under NSA, the process for settling up on those unpaid balances goes through the NSA resolution process.
It’s complicated and thorny. We are told that a lot of the cases are resolved for something close to the in-network rate, but there are a number of providers who appeal to the arbitration process for more money.
In a study earlier this year, Rand researchers found that it is not impossible that NSA will ultimately result in higher prices.
Earlier Texas case
UnitedHealth filed a similar suit against Radiology Partners regarding billing in Texas in 2023, according to Radiology Business. Radiology Partners had filed a claim for $100 million against United, saying it had underpaid RP physicians; United then countersued.
“UnitedHealthcare gave the example of Singleton Associates, a small practice in Houston, that was contracted with two local hospitals,” the trade publication reported. “The group allegedly obtained ‘particularly high reimbursement rates’ from UHC via a contract first executed in 1998. The agreement allegedly said Singleton could only bill for services performed by “medical group physicians” who were “shareholders, partners or employees.” And it could not assign those rights to other docs without first notifying the payer.
“For years, the practice abided by the agreement, UHC said, until it became part of the bigger group. ‘Once Singleton was controlled by Radiology Partners, Radiology Partners caused Singleton to breach the agreement by submitting claims for services performed by providers who were not shareholders, partners, or employees of Singleton and who were not performing services at hospitals where Singleton was contracted. Likewise, Radiology Partners caused Singleton to fraudulently bill United for services performed on individuals who were not Singleton’s patients.’”
That case was ultimately settled in arbitration, with neither side having to pay anything.
