Aetna is a company that uses its name as branding for products and services it provides for clients through its massive group of insurance companies. It serves an estimated 39 million people by covering claims and providing life insurance to help them make responsible decisions about health care and health care spending. The company has a strong reputation as one of the major insurers in the United States, but it has also experienced its share of legal problems arising from claims filed in law courts. Our research revealed dozens of high-profile lawsuits that suggest there are weaknesses in the company that lead to financial injury to some of its clients. Here are the ten biggest lawsuits in company history.
10. Aetna penalized for insurance violations Penalty amount: $1.95 million
The New York Department of Financial Services penalized Aetna for $1.95 million for consumer protection-related offenses that resulted in the violation of insurance laws and regulations. Numerous violations were cited after investigations into Aetna Health Inc.’s practices were completed. The investigations discovered evidence that Aetna missed deadlines for making pre-authorizations, failed to acknowledge and respond to member complaints, and it failed to acknowledge receipt of members’ grievances for starters. There were other violations noted that showed that Aetna had hung many of its policyholders out to dry by failing to make prospective determinations that affected the health and well-being of policyholders. The case was settled in December of 2018, with Aetna Insurance company facing a fine of $1.9 million for its poor conduct.
9. Aetna fined for consumer protection offenses Penalty amount: $2.5 million
The New Jersey Department of Banking & Insurance filed a civil suit against Aetna for insurance violations resulting in consumer-protection-related offenses. Aetna made reports to the Department about processing out-of-network hospital and non-hospital facility claims for persons holding individual health policies and small employer health contracts from October 2002 through September 2009 which showed Aetna improperly processed the claims. The errors resulted in underpayments to the providers or policyholders. Aetna was held responsible for making remediation for all underpayments with an additional 12 percent interest added to each reimbursement. The order mandated Aetna to complete the reprocessing and payments before April 30, 2010. Aetna was held responsible for its neglect to properly process payments and warned to implement training to ensure that the problem would not occur again. This was one of many such offenses that Aetna was accused of committing.
8. Aetna settles insurance violation offense Penalty amount: $4.5 million
Aetna was accused of failing to follow established state insurance violations regarding health insurance provisions for the treatment of autism and abortion procedures. The Missouri Department of Insurance filed a civil suit and launched an investigation into the allegations in 2015. Aetna settled with an agreement to pay $4.5 million to resolve the situation. The Missouri Department of Insurance suspended $1.5 million of the penalty, requiring Aetna to pay a total of $3 million. The case was officially settled and closed on May 15, 2015. In addition to paying the penalties for its violations, Aetna was also required to implement procedures that would ensure that Aetna’s actions would fully comply with the State of Missouri’s statutes and regulations about the violations committed. The order further required Aetna to maintain its remedial actions at all times.
7. Aetna sued for shortchanging university students Settlement amount: $5.1 million
The State of New York reports that Attorney General Andrew Cuomo announced a settlement in an insurance claim against Aetna that alleged the insurer made promises to reimburse students holding policies that they would be reimbursed for certain services under the health care plans sponsored by their respective colleges. Aetna Student Health is alleged to have broken the trust by failing to reimburse the agreed-upon rates, shortchanging an estimated 73,000 students covered under the college-sponsored plans. The Attorney General’s office and Aetna agreed to a reimbursement to the 73,000 students and more than 200 colleges, 20 of which are in New York State, of $5.1 million. Aetna Student Health was found to have used outdated reimbursement rate information which resulted in the shortchanging of students and doctors throughout the United States. The case was settled on January 15, 2009. They corrected their mistakes for making underpayments, paid the doctors and students for the mistakes, and also paid interest and penalties.
6. Aetna accused of insurance violations Settlement amount: $9,457,500
Aetna Health, Inc was accused of paying certain claims categorized out of network at the rate of 125 percent of Medicare at 75 percent of Medicare for lab fees and durable medical equipment. Letters sent by Aetna to providers explained Aetna’s determination of what they considered fair payment and that additional reimbursement was not on the table. This was the claims practice that Aetna applied for emergency care services, and referrals or authorizations by Aetna and to nonparticipating providers when patients were admitted to network hospitals. Aetna knowingly exceeded the charges of what its payment obligations for these services were in the letters sent. The situation occurred in June of 2007. Providers complained about Aetna’s policies which triggered an investigation into its practices. Aetna was investigated by the New Jersey Department of Banking & Insurance in a civil case at the state level that resulted in Aetna Health, Inc being ordered to pay a penalty for the consumer protection violation of $9,457,500 for the offense.
5. Aetna penalized for consumer-protection offenses in 2011 Settlement amount: $11,495,614
The New York State DFS reports that Aetna was named in a lawsuit over health insurance overcharges to businesses and consumers that involved multiple insurers, Aetna being a member of the group named in the lawsuit. In a case that resulted in refunds of nearly $115 million, Aetna was required to refund $11.495 million for overcharging consumers and businesses on medical care insurance premiums. Aetna and the other named defendants increased their premiums although laws were enacted to help prevent rates from spiraling out of control. The New York State Department of Financial Services discovered that eleven health insurance companies failed to comply with the established laws, resulting in overcharges to their customers. Each was required by law to issue restitution to the clients overcharged on their medical premiums. The total number of New Yorkers affected was just under 600,000.
4. Aetna sued for HIV privacy breach lawsuit Settlement amount: $17 million.
The Aids Law Project of Pennsylvania confirms that a lawsuit was filed against Aetna alleging that the company improperly sent the names of more than 13 thousand customers prescribed HIV medications personal information to its legal counsel, revealing the names of persons being treated for the medical condition. Letters with large transparent windows showed the names of the patients and disclosed that they received the HIV medication prescriptions. The result was an HIV privacy data breach. A class-action lawsuit was filed in the Beckett v. Aetna case. Aetna agreed to a settlement of $17 million to resolve the HIV violations and compensate the affected parties with a base payment of $75 each and an additional $500 each for the customers receiving mail with large window letters. Some plaintiffs may seek monetary relief of up to $20,000 each if they provide documentation of either financial or non-financial harm.
3. Aetna sued for unfair health insurance reimbursement rates Penalty settlement: $20 million
Way Back Machine reports that in 2009, Aetna was accused of overcharging consumers for the cost of out of network healthcare services. The attorney general announced in February of 2008 that investigations into these allegations would commence. Americans were charged higher premiums for plans that allowed them to use out-of-network providers in exchange for Aetna’s promise to cover as much as 80$ of the customary rates for the charges with consumers paying the balance. Reforms in the insurance industry demanded that the insurers control reimbursement rates to reflect a fair assessment within the market. In February 2008, the Attorney General announced an industry-wide investigation into allegations that health insurers unfairly saddle consumers with too much of the cost of out-of-network health care. Seventy percent of insured working Americans pay higher premiums for insurance plans that allow them to use out-of-network doctors. In exchange, insurers often promise to cover up to eighty percent of the “usual and customary” rate of the out-of-network expenses, and consumers are responsible for paying the balance of the bill. Under this system, insurers control reimbursement rates that are supposed to fairly reflect the market for their respective geographical locations. Investigations into the matter revealed that consumer protection laws were violated by Aetna. Reimbursement rates were unfair and Aetna agreed to a settlement that required payment of $20 million to a nonprofit organization that would create a new database to help them fairly calculate out-of-network reimbursement rates for all Americans throughout the nation, based on the market in specific geographic locations.
2. Aetna denies cancer patient coverage Settlement amount: $25.5 million
CNN confirms that an Oklahoma jury heard the case that a cancer patient filed against Aetna for denying coverage, further alleging bad faith on the part of the insurance company. In 2014, Aetna denied Orrana Cunnigham, a patient with stage 4 nasopharyngeal cancer near her brain stem coverage for proton beam therapy targeted radiation treatment. The treatment offered less risk of blindness or other complications over standard radiation. The jury heard the case and concluded that Aetna’s behavior was reckless and that the insurance company acted in bad faith and needed to make changes in the way it approaches decision-making for the health and welfare of its policyholders. The jury further awarded the petitioner $25.5 million.
1. Aetna involved in class action lawsuit for interfering with sound medical practices Settlement amount: $470 million
Corporate Research Project confirms that Aetna was involved in a lawsuit involving a 1999 RICO suit against Aetna and its subsidiaries by a group of attorneys. The class-action lawsuit was filed in Hattiesburg, Mississippi, in a federal district court charging Aetna with limiting referrals to specialists, denying reimbursement for legitimate emergency care, and usurping sound clinical and medical standards while imposing harsh financial sanctions against doctors challenging their rulings. Aetna was acquired by ING during the heat of the lawsuit. Numerous lawsuits were brought under the court of a Miami Federal judge who granted class-action status in 2002. Aetna agreed to a settlement of $470 million to resolve the case involving the physicians with $100 million going to the doctors, $50 million to their lawyers, and an additional $20 million to fund a foundation to improve the quality of healthcare. An additional $300 million was put into the overhaul of Aetna’s payment systems as well as the promise of Aetna to cease interference with medical decisions.
Aetna has been involved in dozens of lawsuits with many of them either settled quietly out of court or resolved for less than $1 million. The most expensive settlement was $470 million for bullying physicians and imposing retaliation if they disagreed with Aetna’s refusal to cover some treatments. We’ve seen a pattern of Aetna making decisions that negatively impacted the physical and financial health of its policy holders with disturbing behaviors that resulted in legal action and investigations by state and federal level agencies and political activists. The company has a long track record of illegal activities for which it has been held accountable. If you feel that you’ve been treated unfairly by an insurance company you have the right to file a grievance and to follow up with an attorney to review your case. You may be entitled to restitution if your insurance provider engaged in violations of insurance laws.