Bridges Health consortium sues Aetna for breach of contract
A nonprofit consortium of Western Pennsylvania health networks, including Independence Health, has filed suit against health insurance provider Aetna, alleging repeated breaches of a Medicare collaboration agreement since the start of 2019.
Bridges Health Partners, based in Warrendale, Allegheny County, alleges Aetna has repeatedly used stalling and misleading tactics to avoid paying the full amount owed to Bridges’ health partners through incentives included in their agreement.
The lawsuit was filed in the Allegheny County Common Pleas Court on Tuesday, April 16, and is seeking a declaratory judgment as well as forcing Aetna to abide by the terms of the agreement.
“As a result of Aetna’s conduct, (Bridges) has and will continue to suffer direct economic losses,” the lawsuit states.
Bridges’ main grievance in the lawsuit is centered around the incentive arrangements in the agreement, in which Aetna would have compensated the consortium for improved performance through a Gain Share/Risk Share program.
“(Aetna gives) us a baseline or expected amount of dollars we're supposed to spend on each patient,” said Dr. Robert Zimmerman, chief medical officer of Bridges Health. “And if our medical spend is less than the benchmark, we have the opportunity to earn money.”
However, the lawsuit alleges that Aetna artificially inflated the expenses used to calculate the Gain Share/Risk Share, which resulted in lower payouts for Bridges.
Among other accusations, Bridges accuses Aetna of deducting over $4 million of medical care expense toward items Bridges believes Aetna used to entice patients to choose them as their insurance provider.
“They are basically taking what are called ‘supplemental benefits,’ such as gift cards, meals and gym memberships, but they're charging the cost of all those extra benefits to us at Bridges,” Zimmerman said. “This makes it harder for us to save money against our benchmark.”
These include a Silver Sneakers program, free meals for two weeks, and over-the-counter medications that could only be purchased at a CVS Pharmacy. CVS Health has been the parent company of Aetna since 2018.
“We think they're excellent programs and the patients benefit from these, but we do not feel that we should bear the cost,” Zimmerman said. “We don't believe that our contract states that we should bear that cost.”
Bridges also accuses Aetna of refusing to provide final reimbursements for the 2021 fiscal year and stalling until a revised agreement was signed. When that agreement was signed in January 2023 and the reimbursements arrived, Bridges found that it had received just over $330,000 — far short of the $1.1 million the group estimated it was entitled to.
Although Bridges and Aetna did reach a new agreement, which took effect at the start of 2023, the pattern continued when reimbursements were due for the 2022 fiscal year, the lawsuit alleges. Court documents claimed reimbursements arrived almost four months later than the contract specified, and amounted to just over $3 million in Gain Share/Risk Share payments to Bridges — less than half the $6.2 million Bridges estimated was due.
“It is expected that Aetna will not provide a timely 2023 final reconciliation and will fail to make proper payments to Bridges consistent with the terms of the 2023 agreement,” the lawsuit states. “Aetna has informed Bridges that it intends to continue improperly including expenses from supplemental benefits into the reconciliations under the 2023 Agreement.”
In addition to Independence Health, Bridges Health Partners also includes the Washington Health System, St. Clair Health, and McCandless-based physicians’ practice Genesis Medical Associates, accounting for inpatient and outpatient facilities in 13 counties.
Bridges Health formed in 2015 out of what was then four separate health systems, which included Butler Health System and Excela Health. Those two would merge to form Independence Health in 2023.
A representative from CVS Health offered no comment.
