Lawsuit, Legislation Target Out-of-Network Referrals and Payments

The battle between providers and payors over out-of-network services and procedures has spilled into the courts and legislatures.

The California Medical Association last month sued health insurer Aetna for allegedly underpaying or denying out-of-network physicians and services and for allegedly terminating the contracts of doctors who make such referrals, which according to the plaintiffs is illegal.

Aetna last year sued physicians and health care organizations in California and three other states for allegedly over-billing for out-of-network services, and the insurer maintains that the California suit is merely retaliation for that action.

“We have sued some of these same doctors and surgery centers named in this suit for their egregious billing practices,” Aetna spokeswoman Anjanette Coplin told the AMA’s American Medical News. “This is a countersuit disguised as a class-action lawsuit. We will continue to pursue medical providers whose charges are so grossly out of line.”

One of the states where Aetna is suing physicians for alleged over-billing of out-of-network procedures and services is New York, where progress has been made in the legislature on a bill that would limit an insurer’s ability to deny out-of-network claims by consumers. Before breaking for the summer, the New York State Senate passed S5068A-2011 which “requires health plans with coverage of out of plan medical services to provide certain information to insureds, subscribers, and enrollees.” The bill now moves to the Assembly, which is expected to take it up when the legislature reconvenes.