Aetna Life Insurance Company (Aetna) is able to recoup up to $41 million from Humble Surgical Hospital, LLC (Humble) after Humble used money received from Aetna to pay kickbacks to referring physicians. The U.S. District Court for the Southern District of Texas noted that there are three different methods for calculating the amount that Aetna may take from Humble, and gave Aetna the freedom to elect a method after Humble committed what the court deemed "guerrilla warfare against this court, Aetna, the patients, and common decency" during a case with a "tortured existence" ( Aetna Life Insurance Co. v. Humble Surgical Hospital, LLC, December 31, 2016, Hughes, L.).
Kickbacks. Humble, a five-bed hospital, has received in excess of $41.4 million from Aetna for services provided to Aetna members. Humble is not included in Aetna’s hospital network, and charges more for services than an in-network hospital. Although Aetna’s plan design varies widely, all plans have the following characteristics: (1) Aetna pays a portion of the bill; (2) Aetna pays less when the patient receives services from a hospital with which Aetna has not established a fee schedule; and (3) Aetna does not pay when the patient’s share is waived by the hospital.
Humble sets its prices comparably to major hospitals located in Houston. In order to attract patients, Humble submitted inflated bills to Aetna after paying referral fees to doctors and waiving patient costs. A total of 103 doctors created limited liability companies that pretended to assume Humble’s billing responsibilities and paid an "administrative and investment fee" of $3,500 per year, in exchange for 30 percent of facility fees Humble received from Aetna due to referrals. Humble also promised patients breaks on their out-of-pocket expenses, as well as possible refunds, if Aetna paid in full.
Grounds for recovery. The district judge found that the money paid to Humble still belongs to Aetna, as there was no assignment of benefits from the patient to the shell companies (which, according to Humble’s testimony, actually performed the services), and there was no assignment from the shells to Humble to bill and collect for services. Humble had no right to Aetna’s payments, and Aetna may recover $41.4 million from Humble. The court also found that Aetna was entitled to $30.3 million, the difference between what it paid Humble and what it would have paid if the hospital was in-network, due to Humble’s violation of state law in adjusting patients’ out-of-pocket costs. Finally, Aetna was entitled to the amount of kickbacks paid out, which was $12.4 million. Aetna was given the option to choose one of the three amounts to recover from Humble.