January 06, 2016 Practice Points

Aetna Kickback Suit Against Laboratory Marketing Company Allowed to Proceed

The Eastern District of Pennsylvania held that the action may proceed, even though Bluewave did not submit false or fraudulent claims to Aetna.

By Andrew A. Kasper

Health insurer Aetna’s fraud and conspiracy action against healthcare-services marketing firm Bluewave Healthcare Consultants, Inc. may proceed, even though Bluewave did not submit false or fraudulent claims to Aetna, the U.S. District Court for the Eastern District of Pennsylvania held in a December 28, 2015, memorandum opinion.

In a complaint filed April 10, 2015, Aetna alleged that Bluewave and its owners conspired with the cardiovascular testing disease laboratory company Health Diagnostics Laboratory, Inc. (HDL) to unlawfully induce physicians to order unnecessary laboratory services provided by HDL for Aetna beneficiaries. According to the complaint, Bluewave contacted referring physicians and told them that they would receive a payment for each blood sample they referred to HDL for analysis. Bluewave received commissions from HDL from the revenue the laboratory collected from sales attributable to Bluewave’s marketing efforts. Aetna alleged that Bluewave received more than $200 million in improper commissions during the course of the alleged conspiracy.

Bluewave moved to dismiss Aetna’s complaint on grounds that HDL, rather than Bluewave, submitted the allegedly fraudulent bills. Therefore, Bluewave maintained, Aetna could pursue legal recourse only against HDL.

The court rejected Bluewave’s argument, explaining that under Pennsylvania common law, a party can be liable if it “authorized” or otherwise “participated” in a fraudulent misrepresentation, even if the party did not make the fraudulent misrepresentation serving as the basis of the claim. The court held that the complaint’s allegations regarding Bluewave’s participation in the kickback scheme were sufficient to satisfy the participation requirement, even under Federal Rule. The court also denied Bluewave’s motion to dismiss Aetna’s tortious interference with contract, unjust enrichment, and civil conspiracy claims.

The alleged conspiracy between Bluewave and HDL also is the subject of a pending qui tam action against Bluewave. In April 2015, HDL agreed to pay $47 million to settle a False Claims Act action alleging that HDL violated the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, by paying physicians to request medically unnecessary laboratory tests provided by HDL. HDL subsequently filed for bankruptcy protection.

— Andrew A. Kasper, Robinson, Bradshaw & Hinson, P.A., Charlotte, N.C.


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