Federal judge rejects Aetna’s $225M fraud claim, finds for North Cypress

By David Yates | Jun 22, 2016

HOUSTON – A federal judge has rejected Aetna Life Insurance’s fraudulent billing allegations brought against North Cypress Medical Center.

On June 15, Judge Kenneth Hoyt issued a decision, finding no merit in Aetna’s allegations that North Cypress Medical Center had committed common law fraud, healthcare fraud and misrepresentations in over 44,000 claims, according to a June 22 press release.

Dr. Behar  

“After an all-out, specious legal assault by Aetna against our ten year-old general acute care hospital, the court has affirmed what we knew all along: North Cypress’ administrative and management practices do not violate any federal or state laws,“ said Dr. Robert Behar, North Cypress’ founder and CEO.

“Truth and facts were our defense.”

The complex litigation between the parties involved multiple lawsuits and counterclaims.

Aetna’s allegations were fully rejected by the court, and the court refused to award any of the $225 million in damages sought by Aetna from North Cypress, finding that there is not “a scintilla of evidence of fraud” on the hospital’s part and that North Cypress Medical Center did “not engage in fraudulent conduct.”

In North Cypress Medical Center, et al. v. Aetna Life Insurance Company, Aetna was sued for the improper reimbursement of healthcare claims by a general acute care hospital.

Aetna counterclaimed for alleged overpayments on more than 44,000 claims amounting to over $225 million.

A three-week jury trial was completed on May 6. The following month, the court dismissed all of Aetna’s claims with prejudice.

“This was a classic case of overreach and corporate bullying by a national insurance company intent on forcing healthcare providers to bend to its money-grabbing tactics, disallowing charges, inventing new rules suddenly and moving the goal posts regularly on us,” Behar said.

“On behalf of our patients, payers and talented medical staff, North Cypress refused to comply with Aetna’s unethical demands and we aggressively and successfully defended our management practices and quality healthcare delivery principles.”

The court “struck” the expert testimony and opinions of Mary Beth Edwards, a representative and consultant with Navigant Consulting, Inc. in Washington, D.C.

Edwards was hired by Aetna to present a damage model of Aetna’s alleged, calculated damages.

The record indicates that Navigant charged more than $300,000 for the work performed by Edwards and others at Navigant. The Court in its ruling said Edwards’ testimony was “truly prejudicial and as established by her testimony a built-in bias that had nothing to do with the evidence presented.”

North Cypress Medical Center’s litigation team is composed of lead counsel, J. Douglas Sutter of Kelly, Sutter & Kendrick, P.C. and Neil L. Prupis of Wilson, Elser, Moskowitz, Edelman and Dicker LLP.

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