Aetna has filed a lawsuit challenging the out-of-network practices of a California surgery center management company and its 7 centers. The suit was filed on Feb. 2 in Santa Clara County Court against Bay Area Surgical Management (BASM) and its centers in the Silicon Valley area.

The Aetna lawsuit challenges the legality of BASM centers' practice of waiving co-payments from out-of-network patients. It also alleges that the centers cherry-pick Aetna members who opt for higher-cost PPO plans that let them access out-of-network providers over serving HMO patients who get lower in-networks rates. And finally, it claims surgeon-owners of the centers are not informing patients of their ownership status, as California law requires.

Daron Tooch, the attorney for BASM, says Aetna's claims are unfounded and "full of misstatements of fact and law." BASM has filed a motion to dismiss the lawsuit. Mr. Tooch notes that waiving the co-pay has been deemed legal in California, based on a 1981 opinion by the California Attorney General. Mr. Tooch adds that the surgery centers' focus on higher-paying PPO members is necessary because Aetna's in-network payments are too low. He also disputes that BASM surgeons are not informing patients of their ownership status.

Mr. Tooch says Aetna, which has sued 5 other out-of-network providers, is using lawsuits to "bully" out-of-network surgery centers. He notes that the Aetna lawsuit follows a January lawsuit BASM filed against Aetna, alleging breach of contract for allegedly underpaying a claim by BASM's Los Altos Surgery Center. Furthermore, Mr. Tooch also says Aetna told a BASM center the lawsuit would be dismissed if it signed a contract with Aetna.

The Aetna lawsuit alleged BASM's out-of-network centers charged much more than Aetna's in-network centers. For example, the insurer said Bay Area Surgical Group, managed by BASM, received an average of $119,671 for lower-back disk surgeries, compared with $6,175 each at contracted facilities.

Mr. Tooch did not directly dispute those figures, but noted that Aetna chooses how much it will pay out-of-network providers, rather than paying whatever is billed. "By attacking out-of-network providers who are simply trying to deliver the best care, patients' right to choose is being threatened," he says.

Richard J. Doren, an attorney for Aetna, did not directly respond to questions, but he did ask Aetna to send a summary of its lawsuit. Aetna's lawsuit alleges the "scheme" by BASM centers "must be promptly declared illegal to preclude its continuation and replication throughout California, and to avoid the potential consequences of irreparably damaging a system of healthcare delivery on which millions of citizens rely."

Leigh Page