Aetna and OptumHealth have agreed to settle a class-action lawsuit alleging they used a “dummy code” to inflate workers' medical expenses.
A settlement would put to rest a nine-year-long dispute between the companies and plaintiff Sandra Peters, who alleges Aetna and OptumHealth failed to uphold their fiduciary duties under the Employee Retirement Income Security Act of 1974, which governs large-group health plans such as employee benefits.
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CVS Health subsidiary Aetna and UnitedHealth Group unit OptumHealth did not disclose the settlement terms in a notice filed to the U.S. District Court for the Western District of North Carolina on Wednesday. The companies requested that the court suspend pretrial deadlines and give them until the end of January to finalize a deal. The class includes more than 87,700 people and nearly 2,000 health plans.
Peters, a retiree covered under an employer-sponsored Aetna policy, sued in 2015 after her out-of-pocket costs for physical therapy doubled. OptumHealth is listed as a defendant because it managed Aetna’s physical therapy network. Peters and her co-plaintiffs seek reimbursment for the alleged overcharges.
Court discovery revealed emails between Aetna and OptumHealth executives that showed they agreed to add an extra service code to patient bills. The “dummy code” disguised administrative costs as medical expenses and increased out-of-pocket costs for members, according to the plaintiffs.
The district court sided with Aetna and OptumHealth in 2019, ruling that the companies met their ERISA obligations because their policies saved employers money. The U.S. Court of Appeals for the 4th Circuit reversed the decision two years later and order to lower court to reconsider the case. The defendants unsuccessfully sought a Supreme Court review in 2022.
Aetna declined to comment beyond the information contained in the Wednesday court filng and Optum did not respond to an interview request.
