Aetna's $50M overbilling case against medical group moves forward

A federal judge denied Sunrise, Fla.-based Mednax's motion to dismiss Aetna's lawsuit alleging the medical group inflated bills for neonatal care.

Aetna commenced legal action in the Philadelphia Court of Common Pleas in November 2017 by filing a praecipe to issue a writ of summons on Mednax and dozens of its affiliates. In a lawsuit filed in April, Aetna accused Mednax of exaggerating the severity of newborns' clinical conditions and ordering unnecessary tests to inflate bills, ultimately overbilling the insurer $50 million. The "upcoding" scheme allegedly began in 2009 and continued through at least September 2016.

Mednax filed a motion to dismiss the case, arguing that Aetna's claims fell outside of the two-year statute of limitations. Aetna argued its claims are timely under the continuing violations doctrine and the discovery rule, according to The Legal Intelligencer.

On Oct. 23, U.S. District Judge Wendy Beetlestone of the Eastern District of Pennsylvania denied Mednax's motion to dismiss.

"This suit was initiated in November 2017 — accordingly, any wrongful acts that took place in 2016 fall within the two-year limitations period," Ms. Beetlestone said. "Nevertheless, because Aetna has alleged an ongoing scheme that persisted into the limitations period, it is not appropriate to resolve at the pleadings stage whether the continuing violations doctrine allows Aetna to maintain suit for actions that occurred prior to the limitations period. Further, because Mednax allegedly concealed the falsity of its claims, it is possible that the discovery rule applies as well."

Ms. Beetlestone also held that Aetna presented issues of fact in its complaint that need to be explored further.

"It may be shown, as Mednax asserts, that Aetna had access to certain documents regarding Mednax's claims, and that Aetna often investigates claims or denies coverage in such a way as to render its reliance on Mednax's forms unjustifiable," Ms. Beetlestone said. "But that question turns on issues of fact —such as Aetna's access to documentation underlying each claim — and is not appropriately resolved on a motion to dismiss."

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