AMA and other medical societies bring RICO lawsuit against Aetna and CIGNA
The American Medical Association, Connecticut State Medical Society and several other state societies are suing Aetna (NYSE:AET) and CIGNA (NYSE:CI), claiming the companies shortchanged doctors by millions of dollars for out-of-network care. The groups filed lawsuits, proposed as class actions, in a New Jersey federal court this week seeking restitution for what they call a scheme by the insurers to maximize profits.
Aetna and some other insurers have already agreed to pay millions to settle New York Attorney General Andrew Cuomo's investigation into the same matter, but those amounts didn't include any restitution for physicians. The money will be used to create a new database to replace the problematic one run by Ingenix, a UnitedHealth Group (NYSE:UNH) unit.
The Ingenix system is accused of collecting and providing skewed data that insurers use to determine what they consider is "reasonable and customary" to pay physicians who don't participate in their networks. In out-of-network care, doctors can bill patients for the balance if insurance reimbursement falls short.
The lawsuits allege that Aetna and CIGNA violated the Racketeer Influenced and Corrupt Organizations Act, the Sherman Antitrust Act, and the Employee Retirement Insurance Security Act.
Plaintiffs in the suits include medical societies in New York, New Jersey, Texas and North Carolina.
