California’s top court revives a lawsuit in which the California Medical Association accuses Aetna, a major health insurer, of illegally retaliating against physicians who referred patients to out-of-network clinics. The case’s impact on insurer-physician relations and out-of-network referrals could extend beyond state borders. Various parties have filed legal briefs in support of both sides, adding complexity to the contentious issue of “surprise billing” and its potential consequences for patient care and medical billing practices.
California’s highest court has breathed new life into a notable lawsuit with potentially far-reaching implications for insurers’ treatment of physicians who refer patients to out-of-network healthcare providers. The California Medical Association (CMA), representing nearly 50,000 physicians, is at the forefront of this case, challenging Aetna, one of the nation’s largest health insurance companies. The CMA alleges that Aetna engaged in unlawful retaliation against physicians who directed patients to certain out-of-network clinics.
Federal reports indicate that out-of-network claims accounted for a mere 4.7% of professional medical claims in 2020. However, these claims are more susceptible to denial, often leading to unexpected medical bills, prompting state and federal legislation to address “surprise billing.”
On July 17, the California Supreme Court unanimously revived the case after lower courts had dismissed it based on the argument that the CMA lacked standing to sue Aetna. The high court clarified that the CMA does indeed have the right to sue on its behalf, without commenting on the case’s merits.
As the ruling indicates, the lawsuit will return to the Superior Court in Los Angeles County for further proceedings. While its direct impact will be confined to the state level, the outcome could influence judgments in other jurisdictions.
The case, initiated in 2012, contends that Aetna’s actions adversely affected patient care by pressuring and terminating contract physicians who referred patients to out-of-network ambulatory surgery centers.
Aetna has responded by stating that its policy was designed to encourage participating physicians to utilize in-network care providers, such as ambulatory surgery centers, to maintain consistency in their judgments. They further claim that the policy was partly in response to physicians referring patients to facilities in which they had financial interests.
Amidst this legal battle, the CMA has garnered support from various entities, including the California attorney general, city attorneys from major California cities, the American Medical Association (AMA), major labor unions, the AIDS Healthcare Foundation, and the consumer advocacy organization Consumer Watchdog. On the other hand, Aetna has received backing from the U.S. Chamber of Commerce, the California Association of Health Plans, and the Association of California Life and Health Insurance Companies, all of whom filed briefs in support of the insurer.