Aetna to face Kraft Heinz lawsuit, alleging health insurer adds ‘hidden fees'

The Kraft Heinz Co. is gearing for a major federal court battle with Aetna Inc., alleging the Hartford, Connecticut-based managed health care corporation violated its fiduciary duties to enrich itself at the plaintiff’s expense.

Using the Employment Retirement Security Act for its causes of action, Kraft Heinz, which is co-headquartered in Chicago and Pittsburgh, filed suit in the Eastern District of Texas-Marshall Division.

The lawsuit, The Kraft Heinz Co. Employee Benefits Administration Board v. Aetna Life Insurance Co., states that since 2012 Aetna took more than $1.3 billion from Kraft Heinz to pay providers for medical services. That sum includes “millions of dollars in provider claims that never should have been paid,” the complaint alleges.

Aetna did not immediately respond to a request for comment.

‘Cherry-picked data?’

Aetna does not provide traditional medical insurance to Kraft Heinz workers and retirees. This is because Kraft Heinz self-funds its employees’ and retirees’ medical expenses.

Kraft Heinz relies on Aetna to process, review and adjudicate claims for health benefits properly, the complaint states.

Plaintiffs assert Aetna has a fiduciary duty to exercise care to identify, deny and prevent the payment of false, fraudulent or improper provider-submitted claims.

However, Kraft Heinz alleges that because the company’s health costs are self-funded, Aetna treats its expenses with less diligence and includes hidden costs intended to benefit Aetna.

Kraft Heinz notes that the Health Insurance Portability and Accountability Act established specific standards for the preservation and dissemination of medical claims data, data to which Kraft Heinz is entitled, it claimed.

Yet, when Kraft requested the data, Aetna allegedly claimed it was “not familiar” with HIPAA-required medical data sets, the complaint claimed. Aetna allegedly avoided providing Kraft Heinz the data for a year, and when Aetna did respond it allegedly provided very limited data sets, Kraft Heinz said.

“Aetna provided Kraft Heinz with some self-selected and edited medical claims data for 2016 through part of 2022 (with one gap). Although incomplete, on its face Aetna’s incomplete and self-selected data proves Aetna breached its fiduciary duties to Kraft Heinz,” the complaint said.

Aetna allegedly intentionally limited the file to 178 “Aetna-cherry-picked data fields,” but the HIPAA-mandated standard transaction data has more than 400 data fields, Kraft Heinz said.

Hidden fees?

Kraft Heinz alleges Aetna prioritizes its traditional medical insurance clients over self-funded clients, and paid most of Kraft Heinz employees’ and retirees’ provider claims “almost immediately, with no follow-up inquiry—Aetna has taken millions from Kraft Heinz to pay thousands of duplicate claims.”

Kraft Heinz also accuses Aetna of cross-plan offsetting.

Aetna allegedly overpays a provider using funds from one Aetna client, then Aetna “corrects” this by deducting an overpayment from the next payment to the provider. But that next payment reduction is allegedly done without regard to which Aetna client gets the benefit, plaintiffs claim.

“That ‘next’ payment comes from either another self-funded plan or, most frequently, one of Aetna’s fully insured plans,” Kraft Heinz alleges.

Related: UnitedHealthcare hit with ERISA lawsuit for allegedly reversing an approved claim

Another alleged Aetna hidden-fee practice that Kraft Heinz complains of is Aetna’s use of repricing companies.

Allegedly, when Aetna receives a claim from out-of-network providers, it often engages a repricing company to negotiate a lower amount. One such repricing company is Global Claims Services, but Kraft Heinz claims Aetna owns that company.

“Aetna extracts the ‘fee’ for the repricing companies from the amounts it seeks and obtains from Kraft Heinz to pay provider medical claims,” Kraft Heinz alleges.

Kraft Heinz is seeking a judgment ordering Aetna reimburse the plaintiff for alleged losses resulting from prohibited transactions, and that Aetna be disgorged of profits made from alleged prohibited transactions.

Kraft Heinz also wants a preliminary injunction compelling Aetna provide all health plan claims data.