The suit argues that Aetna “took money from Grainger under the guise of claims administration, transferred the money to accounts under Aetna’s control, paid a fraction of that money to health care providers to settle the claims, and kept the difference.”
(Another) Fiduciary Breach Asserted in TPA Healthcare Claims Processing
Source: Nevin Adams, JD, 5/20/2024, National Association of Plan Advisors (NAPA)
Case: W.W. Grainger v Aetna Life, Case 2:24-cv-00352, US Eastern District of Texas, Court’s Document
Excerpts
The plaintiffs here are both the plan sponsor and benefit plans impacted by the actions of defendant Aetna Life Insurance Company.
The suit notes that, in its role as a TPA of the plans, Aetna had contractual and statutory obligations to prevent fraud, waste, and abuse in connection with the more than $150 million in claims for health benefits submitted to the plans for payment—and that “Aetna’s failure to perform its most basic obligations cost Grainger millions and millions of dollars.”
The suit argues that Aetna “took money from Grainger under the guise of claims administration, transferred the money to accounts under Aetna’s control, paid a fraction of that money to health care providers to settle the claims, and kept the difference.” In fact, the suit alleges, “Aetna did not use the fraud prevention techniques it regularly employs when administrating claims for its own fully insured plans. Aetna never refunded or credited the difference to the Plans.”
Fiduciary Status
The suit states that Aetna’s decision-making authority under the agreement went “far beyond mere application and compliance with its own guidelines. Because Aetna exercised discretionary authority and control over the management of the Plans and the disposition of the Plans’ assets, in addition to being a named ERISA fiduciary, Aetna was also a functional fiduciary.”
