The U.S. Supreme Court denied OptumHealth's bid to drop a class-action, which alleges the company worked with Aetna to fraudulently pass on administrative costs to patients and employers by disguising them as medical expenses.
The nation's highest court rejected OptumHealth Care Solutions' writ of certiorari on Monday. The case will now be sent back to the Fourth Circuit Court of Appeals, where OptumHealth and Aetna will have to defend allegations that their tricking a 71-year-old retiree, along with other patients and their employers, into overpaying for healthcare services violated the Employee Retirement Income Securities Act.
The case comes on behalf of Sandra Peters, a North Carolina resident who noticed her out-of-pocket expense for her monthly physical therapy appointments unexpectedly doubled to $14 in February 2014. Peters is a retiree who received coverage through her husband's former employer, Mars, Incorporated, the food manufacturer known for brands like Pedigree, Skittles and Snickers. Peters wrote more than a dozen letters about the issue to Aetna, which served as Mars' third-party administrator. Aetna denied that there was anything wrong with her bill.
Unsatisfied with the response, Peters responded by filing a class-action against Aetna's upcharge in 2015. The court discovered that Aetna had subcontracted out its provider network for physical therapy and chiropractor specialists to Optum, the healthcare services arm of UnitedHealth Group. The two companies disguised the administrative fee Optum charged as a dummy medical code and passed on the cost to Mars, its workers and other employers.
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A North Carolina judge initially ruled in Optum's and Aetna's favor, noting that because Optum did provide Mars and other employers a cheaper network of providers, the overall arrangement saved the company and its workers money.
However, in June, a federal appeals court reversed this decision, finding that Aetna unjustly enriched itself through the scheme by charging thousands of workers, Mars and other employers an estimated $15 million. OptumHealth had requested the Supreme Court review the legality of this decision, which hinged on the finding that the individual cost paid mattered more than the aggregate. Their refusal to see the case means that Peters' class-action will move forward in federal appeals court.
Peters is seeking restitution, surcharge, disgorgement, and declaratory and injunctive relief on behalf of all ERISA beneficiaries, as well as Mars.
Aetna did not respond to an interview request. Optum, on the other hand, said it had nothing further to share on the matter.
