Case: W.W. Grainger v Aetna Life, Case 2:24-cv-00352, US Eastern District of Texas
Industrial supplier W.W. Grainger Inc. filed a lawsuit saying Aetna Life Insurance Co. mismanaged its self-funded health plans by approving false and excessive claims and pocketing money that should have gone to medical providers.
Aetna took money from Grainger “under the guise of claims administration” but put only a fraction of that money toward workers’ medical claims, keeping the rest for itself, the company said in its complaint. Aetna approved false and fraudulent claims and engaged in “active deception” to conceal its misdeeds, including limiting Grainger’s audit rights, providing false or inaccurate claims reports, and preventing Grainger from accessing the reports.
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.”
Read the full article at Bloomberg Law News
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