Aetna hits South Texas hospital with $120 million kickback lawsuit

Aetna has filed a $120 million kickback lawsuit against North Cypress (Texas) Medical Center and its CEO, Robert A. Behar, M.D.

The insurer's suit claims that North Cypress engaged in a fraudulent billing scheme that paid kickbacks to physicians for patient referrals and used other improper billing techniques such as upcoding. Aetna claims that it has overpaid North Cypress by as much as $120 million since 2009.

North Cypress allegedly promised ownership interest in the company if physicians referred patients to the hospital over less expensive in-network facilities, according to the complaint.

Behar allegedly reprimanded or even threatened physicians who did not refer enough patients. Aetna claimed his scheme was "by pure design," the suit said, "as part of his greed and personal vendetta against the managed care industry."

To hide the scheme, Aetna claimed that North Cypress consistently overcharged for routine procedures. The hospital used non-specific billing codes and routinely marked up prices. In one example, North Cypress charged $2,552 per surgical anchor screw, according to Aetna's complaint.

Aetna claimed that the billing and kickback scheme was part of North Cypress' effort to upgrade its facilities and create "an upscale five-star hotel-like ambience." Aetna's complaint also noted that the hospital's annual gross revenue exceeds $1.5 billion, which is more than twice that of nearby hospitals with higher volume and more medical services.

Karen Hinton, a spokeswoman for North Cypress, told Becker's Hospital Review that the hospital sees Aetna's lawsuit as part of a "scheme to sue out-of-network providers throughout the nation to coerce them into financially burdensome in-network contracts with Aetna."

A recent court ruling has paved the way for increased "upward sentencing" in healthcare fraud cases, FierceHealthPayer: AntiFraud recently reported. This means that healthcare executives found guilty of abusing a "position of trust" as part of an alleged kickback scheme could face stiffer sentences from judges.

For more:
- here's the lawsuit (.pdf)
- read the Becker's Hospital Review article

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