Aetna is suing two Texas laboratories, alleging the labs engaged in an elaborate scheme in which they charged tens of thousands of dollars more for routine tests, amounting to $50 million in fraudulent payments.
To conceal their activity, the labs submitted “pass-through” bills using the names and information of in-network hospitals, leading to millions of dollars in fraudulent payments during a four-year period, according to the complaint (PDF) filed in Harris County District Court earlier this month. The scheme ultimately forced one hospital out of business.
The two labs—Southwest Laboratories in Dallas and ESA Toxicology in Houston—submitted at least 28,000 fraudulent claims between 2014 and 2017, according to Aetna. In some cases, the charges were “egregious and inflated,” the insurer added, pointing to one instance in which ESA charged more than $10,000 for a urine drug test that a national lab charged just $114.
In another example, Aetna says ESA Toxicology charged $1,500 for a drug test that another area lab charged just $62 for.
Aetna claims the labs paid doctors in illegal kickbacks to obtain specimens. In April, a Tennessee doctor agreed to pay nearly $200,000 after she was accused of taking kickbacks from Southwest Laboratories.
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Aetna claims the fraud scheme—orchestrated by the lab's owners—also “interfered with Aetna’s contractual relationships with its in-network medical providers,” a nod to Bay Area Regional Medical Center, a 191-bed hospital outside of Houston. Aetna claims ESA Toxicology and Southwestern Labs capitalized on the hospital’s status as an in-network provider to bill the insurer.
During the first three months of 2015, Bay Area Regional Medical Center billed Aetna just $5,000 for laboratory services. That figure skyrocketed to $6.4 million in the first three months of 2016 and another $8.7 million in the three months that followed, according to the complaint.
The hospital announced on May 4 that it was closing its doors on May 10 and filing for bankruptcy.
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ESA Toxicology sued (PDF) the provider three days prior to the announcement, alleging the hospital violated its agreements with Aetna and Cigna. The lab included letters from both insurers demanding the hospital return more than $43 million in improper payments.
Southwest Laboratories is also the subject of a sexual harassment lawsuit filed last year by a former employee who alleges she endured months of harassment during what employees called “Gropening Day,” according to The Dallas Morning News. The former employee, Holly Pinks, alleged male employees told her every Friday “everyone would be getting groped or touched inappropriately.”
The fraud lawsuit closely mirrors a recent lawsuit filed by UnitedHealthcare against two separate Texas laboratories last month. In that lawsuit, UnitedHealthcare said Sun Clinical Laboratory and Mission Toxicology siphoned improper payments through rural in-network providers.