On March 12, 2012, the U.S. Department of Health and Human Services (HHS) released the long-anticipated Final Rule and Interim Final Rules (the "Rules") on the Patient Protection and Affordable Care Act's (ACA) state health insurance exchanges ("Exchange(s)"), a key element of President Obama's healthcare reform plan. Set to go into effect on January 1, 2014, the goals of the Exchanges are to enhance competition, improve availability of affordable health insurance options and allow small businesses the same purchasing power that large businesses currently enjoy. As described in the Rules, the Exchanges will operate as competitive marketplaces, allowing individual consumers and small businesses to directly compare pricing and quality of health insurance options, among other factors.

The Final Rule incorporates two proposed rules originally published in mid-2011 that together implement what HHS refers to as the Exchange establishment and eligibility rules that address the eligibility, enrollment and plan function of the Exchanges. Affording substantial discretion to states in the design and operation of the Exchanges, the Final Rule details minimum federal standards for the establishment and operation of the Exchanges, minimum standards that health insurers must meet in order to participate in the Exchange and offer a qualified health plan, and standards of participation for the Small Business Health Options Program.

Read the full text of the Duane Morris Alert.

In a bold and seemingly unprecedented move, Aetna recently sued several California surgery centers for an alleged “fraudulent billing scheme”.  The lawsuit alleges that the surgery centers induced physicians to refer patients to the surgery centers with promises that the patients would not have any financial responsibility for their coinsurance and deductibles.  Aetna claims that the surgery centers then turned around and submitted charges for reimbursement that were artificially inflated driving up the cost of health insurance coverage.

Aetna’s lawsuit alleges that providers are liable for engaging in a fraudulent and illegal kickback scheme when they waive a patient’s coinsurance and deductible amounts, even if the provider bills the patient but ultimately does not collect from the patient.  Aetna is asking the court to require the surgery centers to pay damages, to disgorge their profits, and pay Aetna’s attorney fees.  Aetna is also asking the court to issue an injunction preventing such “fee-forgiving” practices, in the future.

Aetna’s theories of liability are somewhat novel and it remains to be determined if they will be successful.  Providers should be aware that insurers are increasingly using aggressive litigation tactics to challenge unauthorized discount arrangements between providers and patients.  As a result of increased scrutiny by third party payors with respect to charges and waivers of co-pays and deductibles, providers should review their billing and collection practices to ensure contractual, legal and regulatory compliance.