Case 1:21-cv-07838 Document 1-2 Filed 09/20/21 Page 1 of 9
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`Case 1:21-cv-07838 Document 1-2 Filed 09/20/21 Page
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`EXHIBIT A.2
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`EXHIBIT A.2
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`1 of 9
`Case 1:21-cv-07838 Document 1-2 Filed 09/20/21 Page
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`EXHIBIT A.2
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`EXHIBIT A.2
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`FILED: BRONX COUNTY CLERK 08/17/2021 12 : 58 PM)
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF BRONX
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`MONTEFIORE MEDICAL CENTER,
`MONTEFIORE NEW ROCHELLE HOSPITAL, : SUMMONS WITH NOTICE
`MONTEFIORE MOUNT VERNON HOSPITAL, :
`MONTEFIORE NYACK HOSPITAL, ST. LUKE'S :
`CORNWALL HOSPITAL, WINIFRED M. BURKE Index No.
`REHAB HOSPITAL, and WHITE PLAINS
`HOSPITAL MEDICAL CENTER,
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`Date Index No. Purchased: g,)-1 -
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`oo.2}E_
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`Plaintiffs,
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`-against-
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`AETNA HEALTH INC., and AETNA HEALTH
`INSURANCE COMPANY OF NEW YORK,
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`Defendants.
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`To the Person(s) Named as Defendant(s) above:
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`PLEASE TAKE NOTICE THAT YOU ARE HEREBY SUMMONED to appear in this
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`action by serving a notice of appearance on the plaintiffs at the address set forth below, and to do
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`so within 20 days after the service of this Summons (not counting the day of service itself), or
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`within 30 days after service is complete if the summons is not delivered personally to you within
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`the State of New York.
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`YOU ARE HEREBY NOTIFIED THAT should you fail to answer or appear, a judgment
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`will be entered against you by default for the relief demanded below.
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`The nature of this action is as follows:
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`1.
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`Beginning in as early as 1991, Defendants (collectively, "Aetna") entered into
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`various contracts with the Plaintiffs, all of which are healthcare providers that are presently part of
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`the Montefiore Health System (collectively, "Montefiore"). In exchange for Montefiore's
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`provision of medical services to Aetna's members, Aetna agreed to pay Montefiore for its services
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`at rates set forth in the contracts.
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`2.
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`Beginning in and around 2007, several Medicaid Managed Care Organizations
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`("MCOs") hired a third party consultant, Health Management Systems, Inc. ("HMS"), to audit
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`their paid claims.
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`3.
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`Because Medicaid dollars trace their source to state and federal governments,
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`Medicaid is ordinarily a "payer of last resort," and the MCOs frequently audit claims to ensure
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`that Medicaid dollars are not being spent on any claim that should be paid by a commercial insurer,
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`like Aetna.
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`4.
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`These audits are not unusual, as there are a number of scenarios where a healthcare
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`provider might inadvertently bill an MCO when a commercial carrier, like Aetna, is primarily
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`liable.
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`5.
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`One common example occurs when a patient covered by an MCO obtains new
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`employment and receives commercial coverage. In this scenario, it will take time for the MCO to
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`discover the new coverage and, when it does, the MCO will retroactively dis-enroll the patient.
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`6.
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`In the interim, however, the MCO may have processed and paid several claims,
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`with both the MCO and the provider unaware that a third party was responsible for payment. This
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`is only one of several reasons why a provider and an MCO might be unaware of coverage by a
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`commercial insurer when a claim is billed and paid.
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`7.
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`As a practical matter, Montefiore does not and — despite due diligence — cannot
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`know with certainty why Aetna was not immediately identified as the responsible payor for the
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`claims at issue here.
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`8.
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`In the ordinary course, upon discovering that a patient's coverage has changed such
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`that commercial insurance is the responsible primary payer instead of the MCO, the MCO demands
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`repayment of the amounts that it paid on the claims from Plaintiffs.
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`9.
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`Plaintiffs then bill the commercial insurance carrier for the claims at the rates in
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`their respective contracts with the commercial insurance carrier. This process, known as
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`coordination of benefits, results in the MCO receiving a refund for the amount that it paid before
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`Plaintiffs or the MCO became aware of the commercial insurance coverage.
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`10.
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`Coordination of benefits also allows Plaintiffs to bill the commercial insurance
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`carriers at its negotiated contract rates for the claims that were refunded to the MCOs, or will be
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`refunded to the MCOs upon receipt of the payment from the commercial carrier. The rates paid
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`by MCOs are typically tied to the Medicaid rates and are substantially lower than those paid by
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`commercial insurance carriers.
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`1 1.
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`After auditing the MCOs claims, HMS discovered Aetna's liability for many
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`Montefiore claims that had been paid by the MCOs. What should have occurred next was that the
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`MCOs should have alerted Montefiore to the fact that Aetna was the responsible primary payer so
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`that Montefiore could bill Aetna for its services at the Montefiore/Aetna contract rates, and then
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`reimburse the MCOs for the claims they had inadvertently paid.
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`12.
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`Rather than engage in the usual coordination of benefits, Aetna reimbursed the
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`MCOs directly for the amounts that the MCOs had paid Montefiore on the claims. When it paid
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`the MCOs, however, Aetna paid only the Medicaid rate that had been paid by the MCOs for
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`Montefiore's services. The Medicaid rate is substantially lower than the rates that Montefiore and
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`Aetna agreed to in the contracts between them.
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM)
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`1 3.
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`Worse, Aetna remained entirely silent about having reimbursed the MCOs directly,
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`meaning that Aetna simply kept the difference between the low Medicaid rate it paid the MCOs
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`and the higher contractual rate it was required to pay Montefiore, based on the contracts.
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`14.
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`This secret direct-payment scheme deprived Montefiore of millions of dollars in
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`commercial insurance reimbursement that it was entitled to under its contracts with Aetna.
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`1 5.
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`Plaintiff Montefiore Medical Center (MMC) discovered this scheme in or about
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`2016, only as it related to another commercial payor, not Aetna. MMC sued that payor and was
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`successful and, in the course of that litigation, subpoenaed HMS' records.
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`1 6. HMS' records, recently received by Montefiore, have revealed that Aetna has also
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`engaged in this direct-payment scheme in an effort to deprive Montefiore of its contractual
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`payment on claims.
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`1 7.
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`This direct-payment scheme was hidden from Montefiore by Aetna because it
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`created a windfall to Aetna, which only paid the Medicaid rate instead of the contractually
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`negotiated rates it actually owed to Montefiore.
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`1 8.
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`Additionally, Aetna hid this scheme from Montefiore in order to induce Montefiore
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`to enter into several new agreements with Aetna that were favorable to Aetna, but that would never
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`have been signed had Aetna not hidden this conduct from Montefiore.
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`19.
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`Thus Aetna had knowledge of a material fact that it concealed to induce Montefiore
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`to sign new agreements in Aetna's favor, which Montefiore did in ignorance of the direct-payment
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`scheme, to its detriment.
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`20.
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`Many commercial insurers like Aetna also pay into the "Public Goods Pool"
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`established under the New York Health Care Reform Act ("HCRA"). HCRA surcharges are used
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`to fund health care initiatives and care for the indigent within the state. Upon information and
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM)
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`belief, Aetna's direct-payment scheme allowed it to avoid payment to the state of the HCRA
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`surcharges it owed on the claims, creating an additional windfall for Aetna at the expense of the
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`state.
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`21.
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`Upon further information and belief, Aetna's direct-payment scheme has been used
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`by Aetna to similarly underpay many other healthcare providers throughout New York State, even
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`during the pandemic crisis that has left providers facing ever-increasing financial challenges.
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`22.
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`Aetna's conduct toward Montefiore amounts to breach of contract, breach of the
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`covenant of good faith and fair dealing, fraud in the inducement, and violation of the New York
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`State Prompt Pay Law (N.Y. Ins. Law § 3224-a).
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`23.
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`As a result of Aetna's conduct, Montefiore has suffered damages in an amount to
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`be determined at a trial in this proceeding, but no less than $6,693,598, plus interest, Prompt Pay
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`Law interest, costs, disbursements, attorneys' fees, and such other and further relief as this Court
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`may deem just and necessary.
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`24.
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`In addition, because of the willful nature of the conduct committed by Aetna,
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`designed to knowingly deprive Montefiore — not-for-profit healthcare providers — of millions of
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`dollars for services that were actually provided and which Aetna knew it was responsible to pay,
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`and to deter such conduct in future, Montefiore is entitled to punitive damages in an amount to be
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`determined by the Court.
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`25.
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`Finally, upon information and belief, Aetna is still engaging in this direct-payment
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`scheme, despite Montefiore's demands that it honor its contractual obligations. Aetna's conduct
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`is causing harm that Montefiore is unable to quantify because it is being left deliberately in the
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`dark about which claims Aetna is paying directly to the MCO's. Accordingly, Montefiore is
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`entitled to and will seek appropriate injunctive relief from the Court, requiring Aetna to cease this
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`practice.
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`26.
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`In addition to the direct-payment scheme above, Aetna has also recently engaged
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`in conduct amounting to a breach of its Hospital Services Agreements with Montefiore.
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`27.
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`The agreements contain provisions pursuant to which Aetna agreed not to deny
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`Montefiore's claims for covered services provided to Aetna's members on the basis of, among
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`other things, lack of authorization or medical necessity (the "No Denial Provisions").
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`28.
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`After over fifteen years of honoring the No Denial Provisions with respect to all
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`Montefiore claims, Aetna suddenly reversed course and began to erroneously assert, on November
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`18, 2020, that the No Denial Provisions do not relate to outpatient claims.
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`29.
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`Aetna has now denied thousands of those claims in breach of its agreements with
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`Montefiore as a result of its obviously incorrect and inconsistent position on the applicability of
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`the No Denial Provisions to outpatient claims.
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`30.
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`As a result of these breaches of the agreements by Aetna, Montefiore has been
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`damaged in an amount no less than $1,413,353.
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`31.
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`The nature of this action is, accordingly, for money damages related to Defendants'
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`breach of the Parties' agreements (including a breach of the covenant of good faith and fair
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`dealing), and violation of New York Insurance Law § 3224-a (the "Prompt Pay Law"). In the
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`alternative, to the extent that Aetna challenges the existence of a contractual relationship with
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`Montefiore, or that Aetna claims that the services for which payment is sought are not covered by
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`the Parties' agreements, this action seeks money damages for Aetna's breach of implied contracts
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`and unjust enrichment. Finally, Montefiore will seek injunctive relief related to the direct-payment
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`scheme being engaged in by Aetna.
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`61528 14v.4
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`The relief sought herein is: (a) compensatory damages in an amount to be determined by
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`the Court, but in no event less than $8,106,951; and (b) punitive damages in an amount to be
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`determined by the Court; and (c) injunctive relief; plus (d) interest, Prompt Pay Law interest, costs,
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`disbursements, and attorneys' fees; and (e) such other an further relief as this Court may deem just
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`and necessary.
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`Should defendant(s) fail to appear herein, judgment will be entered by default for the sum
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`of no less than $8,106,951, plus interest and costs.
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`Venue
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`Plaintiffs designate Bronx County as the place of trial. The basis of this designation is
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`Plaintiffs' residence in Bronx County, and that Bronx County is the county in which a substantial
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`part of the events or omissions giving rise to Plaintiffs' claims occurred.
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`Dated: Great Neck, New York
`August 17, 2021
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`GARFUNKEL WILD, P.C.
`Attorneys for Plaintiffs
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`By: /s/ Michael J. Keane
`Michael J. Keane
`Colleen M. Tarpey
`Joshua M. Zarcone
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`1 11 Great Neck Road
`Great Neck, New York 11021
`(516) 393-2200
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`TO: Aetna Health, Inc.
`1425 Union Meeting Road
`U23S
`Blue Bell, PA 19422
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`6152M41/4
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`FILED: BRONX COUNTY CLERK 08/17/2021 12:58 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 811188/2021E
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`RECEIVED NYSCEF: 08/17/2021
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`Aetna Health Insurance Company of New York
`980 Jolly Road
`Blue Bell, PA 19422
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`61528 14v.4
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