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The state of Kansas is suing Aetna over allegations that the insurer violated the Kansas False Claims Act by presenting false information about claims to a public employee health plan.
Aetna, a subsidiary of CVS Health, is one of the two health insurers acting as third-party administrators for the state's State Employee Health Plan.
The Kansas State Employee Health Plan is a self-insured health plan that administers health coverage for about 85,000 public employees and dependents in Kansas.
Aetna used an outside repricing vendor to "suppress provider reimbursements below both billed charges and the amounts withdrawn from the plan," then teamed up with the vendor to "retain a portion of the resulting 'savings' as compensation, funded directly from plan assets rather than from Aetna's administrative fee," according to a complaint Kansas filed June 24 in a state court in Shawnee County, Kansas.
In some cases, the state alleges, Aetna has been "paying itself more in administrative fees than it pays a provider of clinical services."
That "is indefensible and begs the question of whether Aetna is acting as a prudential fiduciary," the state says. "None of these practices was disclosed to the state in a manner sufficient to permit oversight."
As a public employee plan, the Kansas plan is not subject to the federal Employee Retirement Income Security Act, but the "fiduciary and trust-based principles articulated ... above — duties of loyalty, prudence and asset segregation, and the prohibition against an administrator using one plan's assets to satisfy obligations arising under another — apply with equal force to any administrator entrusted with public funds and the health benefits of public employees," the state says.
Aetna could not immediately be reached for comment. It has told publications in Kansas that it denies the allegations and will defend itself vigorously in court.
What it means: In recent years, health care providers, pharmacists and government officials have focused much of their attention on attacking the pharmacy benefit managers that serve employer plans.
The new suit may be a suit that plaintiffs will focus more on the TPAs that help employers run self-insured health plans.
The new suit could also be a sign that plaintiffs in TPA suits will look harder at "cross-plan offsetting," or the use of the resources at one health plan to support another plan.
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