Lawsuit Against Insurer Claims Retaliation Against Docs for Out-of-Network Referrals

Health Insurance Claim Denied? See What Insurers Said Behind the Scenes —  ProPublica

California’s highest court has revived a high-profile lawsuit that could have a major impact on whether insurers can punish physicians who refer patients to out-of-network providers.

The case, which has bounced around courts in the Golden State since 2012, pits the nearly 50,000-member California Medical Association (CMA) against Aetna, one of the nation’s largest health insurers. The physician group alleges that Aetna illegally retaliated against physicians who sent patients to certain out-of-network clinics.

Out-of-network providers and clinics were involved in just 4.7% of professional medical claims in 2020, according to a federal report released this month. Such claims are more likely than others to be denied, and they result in unexpected medical bills, which have led to the passage of state and federal laws that target “surprise billing.”

 

In a July 17 ruling, the California Supreme Court unanimously resurrected the CMA v Aetna case after a judge and a state appeals court killed it on the grounds that the CMA ― which is affiliated with the American Medical Association (AMA) ― had no standing to sue Aetna. The high state court declared that the CMA could sue on its own behalf, but the justices noted that their ruling says nothing about the merits of the case.

The ruling appears to mean that CMA’s lawsuit will head back to Superior Court in Los Angeles County. The outcome of the case won’t have a direct national effect, since the case is in state court, not federal court. However, state rulings can influence the thinking of judges elsewhere.

 
 

The case, filed in 2012, alleges that Aetna harmed patient care by harassing and sacking contract physicians who referred patients to out-of-network ambulatory surgery centers.

According to the new ruling, Aetna responded by saying that “its policy, rather than interfering in medical judgments, was designed simply to encourage participating physicians, consistent with their judgment, to use in-network care providers, such as ambulatory surgery centers, and was adopted in part in response to physicians referring patients to facilities in which they had financial interests.”

In a 2012 letter to CMA, as reported by the Los Angeles Times, an Aetna attorney went further and claimed that “physicians and their business partners secure outsized and improper windfalls at the expense of Aetna’s plan members and employer plan sponsors.”

‘Fairly Shocking’: Secret Medical Lab In California Stored Bioengineered Mice Laden With COVID

Illegal lab in California carried bioengineered mice, infectious agentsA monthslong investigation into a rural California warehouse uncovered an illegal laboratory filled with infectious agents, medical waste and hundreds of mice bioengineered “to catch and carry the COVID-19 virus,” according to Fresno County authorities.

Health and licensing said Monday that Prestige Biotech, a Chinese medical company registered in Nevada, was operating the unlicensed facility in Reedley, California, a small city about 24 miles southeast of Fresno. The company, according to Reedley City Manager Nicole Zieba, had a goal of being a diagnostics lab.

“They never had a business license,” Zieba told USA TODAY. “The city was completely unaware that they were in this building, operating under the cover of night.”

The Fresno County Public Health Department launched its investigation into the facility in December 2022 after a code enforcement officer saw a garden hose attached to a building that was presumed to be vacant and had no active business license, Zieba said.

Further inspection in March revealed that the facility housed various chemicals, suspected biological materials, bodily fluids and hundreds of lab mice, among other lab supplies, according to court documents.

County public health officials said they also found medical devices believed to have been developed on-site, such as COVID-19 and pregnancy tests.

“Being a small, rural town of 26,000 − walking into what we believed to be a vacant building and finding lab supplies, live white mice … was was fairly shocking,” Zieba said.

After several attempts to communicate with Prestige Biotech, Fresno County officials are accusing the company of not being forthcoming with information and failing to comply with orders, such as providing a plan for hazardous and medical waste disposal.

Fresno County Public Health staff completed biological abatement work of all the materials found in the facility by July 7, according to court documents.

CDC detected at least 20 infectious agents

Zieba said officials had to conduct a separate investigation into the warehouse for several weeks because it was private property.

After authorities discovered that people were working inside the building, Zieba said, federal, state and local agencies joined the investigation, including the county health department and the FBI. Authorities were then able to serve an inspection warrant in March.

“Certain rooms of the warehouse were found to contain several vessels of liquid and various apparatus,” court documents said. “Fresno County Public Health staff also observed blood, tissue and other bodily fluid samples and serums; and thousands of vials of unlabeled fluids and suspected biological material.”

Hundreds of mice also were found at the warehouse, where they were “kept in inadequate conditions in overcrowded cages” with no food or water, according to court documents. An associate with Prestige Biotech told investigators the mice were “genetically engineered to catch and carry the COVID virus,” the documents added.

Under an abatement warrant, the city seized the mice in April and euthanized 773 of them. Nearly 180 mice were already dead, court documents said.

Zieba said officials called in the Centers for Disease Control and Prevention after about 30 freezers and refrigerators were found, with some set to minus 80 degrees. The CDC detected at least 20 potentially infectious agents, according to court documents.

“Ultimately, what we did find is some viruses, such as HIV, COVID, chlamydia, rubella, malaria, things of that nature,” Zieba said.

What is Prestige Biotech?

Prestige Biotech had been operating the unlicensed and unregulated laboratory since October 2022, according to court documents.

Emails between city officials and Xiuquin Yao, the company president, showed that Prestige Biotech had assumed assets from the now-defunct company Universal Meditech Inc. (UMI). Prestige Biotech was a creditor to UMI and became its successor, court documents said.

The assets were then moved to the Reedley warehouse from a site in Fresno, court documents said.

Authorities were unable to find any California-based addresses associated with the company except for UMI’s Fresno location. Court documents noted that other addresses provided were either “empty offices or addresses in China that could not be verified.”

During the investigation, Zieba said the company reported it was making COVID-19 and pregnancy tests with “a goal of being a diagnostics lab.”

Last Updated 08/09/2023

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