Aetna lied about provider network to win Medicaid contracts, suit alleges

Aetna illegally secured contracts with Pennsylvania’s Medicaid program by misrepresenting the number of pediatric providers in its network, according to a federal whistleblower lawsuit unsealed Tuesday.

The insurer benefited from this alleged fraud because the lack of providers limited access to care, saving Aetna money. Aetna Better Health of Pennsylvania CEO Jason Rottman and Alice Jefferson, director of the company’s quality management division, are named as defendants along with the company in the lawsuit, which was filed in the Western District of Pennsylvania.

Aetna, a CVS Health subsidiary, violated the federal False Claims Act by operating a shadow network of primary care providers for children enrolled in HealthChoices, the state’s Medicaid managed care program, the lawsuit alleges. Prosecutors also say Aetna has similar problems with provider networks in all 13 states where it has Medicaid contracts.

Because Aetna was paid on a per-member per-month basis to manage enrollees’ care, the company was able to keep a larger portion of the cash paid through the federally funded program because children were unable to find providers in their network, the suit alleges.

The Pennsylvania Human Services Department would not have inked five-year contracts with Aetna in 2010 or 2014 if regulators had accurate provider directories, the federal government says.

Whistleblowers file qui tam lawsuits on behalf of the government, which can intervene, allow the whistleblower to pursue the claims and oversee the proceedings, or move to dismiss. The government intervenes in fewer than 25% of whistleblower cases and typically only gets involved when there is a high likelihood of success and a potentially large settlement, legal experts said.

Aetna did not respond to an interview request prior to publication of this article. The insurer is currently engaged in a separate lawsuit over why it was not chosen during Pennsylvania’s most recent round of Medicaid managed care bids.

Former Aetna quality management nurse consultant Carol Wessner is the whistleblower who initiated the lawsuit in January.

When Wessner started working at Aetna in 2013, the insurer’s early and periodic screening, diagnostic and treatment testing rates were far lower than the state average, which the company blamed on parental negligence, according to the suit. Aetna also claimed that pediatric providers were discriminating against Medicaid beneficiaries by refusing them service.

The federal government requires that Medicaid beneficiaries under age 21 have access to annual screenings. But after investigating the cause of the low screening rate, Wessner discovered that many of the primary care providers assigned to the company’s nearly 100,000 child beneficiaries were either not contracted with Aetna, dead, operating out of state or did not treat children at all, the complaint says.

In February 2015, for example, Aetna assigned nearly 500 children to receive annual screenings at the Philadelphia Health Department’s eight federally qualified health centers, even though the insurer terminated its contracts with them the previous year, the complaint says.

In 2016, almost half of the primary care providers Aetna assigned to perform periodic health screenings had no experience doing those test during the prior year, according to the lawsuit. Only 21% of primary care providers had seen at least half of their assigned patients during that year, the lawsuit says.

After bringing these concerns to her managers, including Rottman, Wessner was transferred from her role “in retaliation,” according to the complaint. Jefferson, her direct manager, told her to stop reporting the issues in writing and only discuss them verbally. Wessner alleges Jefferson also forbade her from speaking to coworkers or provider relations staff. Eventually, the company fired her after an “organizational review,” the lawsuit says. Aetna made no effort to update its provider networks after being alerted about the inaccuracies of its listings, according to the complaint.

The government is seeking to be compensated for at least twice as much as it incurred in damages related to false billing, the maximum civil penalty allowable under the False Claims Act, reimbursement for court costs, attorneys fees, and any other awards the court deems equitable and just for Wessner.

The amended complaint was submitted Jan. 11 and unsealed on Tuesday.