Aetna, Optum to face revived ‘dummy code’ lawsuit

States fighting scammers as Medicaid redeterminations resume

Aetna and OptumHealth face another round in a legal battle with patients who allege the companies sought to charge more cost-sharing by disguising administrative fees as medical expenses.

Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina certified a class-action lawsuit on Monday that includes more than 87,700 people and nearly 2,000 health plans. According to the plaintiffs, CVS Health subsidiary Aetna and UnitedHealth Group subsidiary Optum violated their fiduciary duties under the Employee Retirement Income Security Act of 1974 through misleading billing practices that increased costs for policyholders and plan sponsors.

The initial plaintiff, retiree Sandra Peters, sued the companies in 2015 after her out-of-pocket expenses for physical therapy doubled under her employer-sponsored Aetna plan. Optum is included in the lawsuit because it built Aetna’s provider network of physical therapists and chiropractors.

During discovery, Aetna and Optum turned over emails that indicated the companies agreed to develop “dummy code” with the intent of “burying the fees” and passing off administrative fees as medical expenses.

Aetna and Optum did not respond to interview requests.

In 2019, Reidinger sided with the defendants, concluding that Peters and the employer that sponsored her plan saved money under Aetna’s policy, and so the insurer and Optum didn’t break the law. A federal appeals court reversed that decision in 2021 and the Supreme Court affirmed that ruling and remanded the case to district court last year.

Based on the higher courts’ reasoning, Reidinger rejected Optum’s motion to dismiss and certified the class on Monday. The judge also denied Peters’ request that the class receive prospective and injunctive relief while the case is pending.

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Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.