In Brief: Aetna Wins $37.4 Million Judgment, CMS Backs Off New Hospital Quality Rating

Aetna Wins $37.4 Judgment Against Silicon Valley Area Medical Group

Insurance giant Aetna has won a $37.4 million judgment against a Saratoga-based medical group.

Aetna sued Bay Area Surgical Management in 2012 over what it claimed was systematic overbilling and fraud. 

Among the allegations leveled by Aetna: Bay Area Surgical recruited local physicians to invest in its facilities, and then encouraged them to refer patients, where as an out-of-network provider Aetna enrollees were charged exhorbitant fees for care provided. The doctors were induced to make the referrals by sharing in the billing largesse.

According to the San Jose Mercury News, one patient was charged $66,000 for a bunion surgery. The medical group also charges more than $6,600 for a colonoscopy, which is about $4,000 more than than the average.

On average, the medical group charged seven times the average bill for equivalent work performed by other clinics in the area, according to Aetna. And among physicians who invested in Bay Area Surgical, as many as 85% of their patient referrals were back to that company’s facilities.

A Santa Clara County jury sided 11-1 with Aetna after a 28-day trial, enough of a margin in a civil proceeding to obtain a judgment.

The Mercury News has reported that both the U.S. Justice Department and the FBI have begun making inquiries into Bay Area Surgical’s practices.

CMS Backs Off Hospital Quality Rating Release

The Centers for Medicare & Medicaid Services (CMS) has delayed releasing an overall quality measure for hospitals after it came under pressure from Congressional lawmakers.

The CMS received letters from 285 members of Congress -- including 60 U.S. Senators -- urging them to delay releasing the metric, which is intended to meld 62 other quality measurements into an umbrella rating that is easy for consumers to understand.

The umbrella rating would rely on a variety of factors, with heavy weighting given to mortality, readmissions, patient experience and safety of care. Effectiveness of care, timeliness of care and efficient use of medical imaging would also be considered.

According to the letter, many hospitals have expressed concern that they currently do not have the tools in place to independently evaluate the CMS ratings to ensure the agency’s methodology is accurate and fair.

CMS had planned to release the new rating to the public on April 21. It has pushed that date back to July.

“CMS is committed to working with hospitals and associations to provide further guidance about star ratings,” the notice said. “After the star ratings go live in their first iteration, we will refine and improve the site as we work together and gain experience,” the agency said in a statement.

CMS indicated it could push back release of the overall rating beyond July, although it has not provided details as to what factors could play into yet another delay.

The American Hospital Association and other trade groups representing hospitals have raised objections to the measure.