Kansas Attorney General Kris Kobach filed a lawsuit in state court June 24 against Aetna, alleging the insurer misused tens of millions of dollars while administering the state employee health plan.
Aetna has served as a third-party administrator since at least 2014, and the state is seeking relief under the Kansas False Claims Act.
“The conduct documented in this petition reflects a sustained pattern in which Aetna has used the discretion delegated to it to advance its own financial interests rather than those of the plan,” the complaint said.
The attorney general claimed Aetna partook in cross-plan offsetting, using funds from one health plan to recover alleged overpayments from another without disclosure or permission. This wasn’t Aetna’s first time encountering this allegation. In 2021, a federal judge in New Jersey found the insurer violated the Employee Retirement Income Security Act on that issue.
“Kansas is the first state to sue Aetna for misusing state health plan dollars to benefit the health plan administrator. However, in other private lawsuits, courts have ruled against Aetna’s cross-plan offsetting scheme as a violation of the company’s fiduciary duty to its customers,” Amber Smith, Kansas’ deputy attorney general of the public protection unit, said in a June 26 news release shared with Becker’s.
The Kansas lawsuit also challenged Aetna’s repricing practices through its National Advantage Program. According to the petition, Aetna routed claims through algorithms from vendors — including MultiPlan, now Claritev — to generate reimbursements below billed charges and the withdrawn amounts, and then kept a share of the resulting “savings” alongside the repricing vendors. The state alleges these fees were drawn from state employee health plan assets rather than Aetna’s administrative fee, and the combined fees paid to Aetna and its vendors exceeded what was actually paid to the provider.
The complaint argued concealment and commingled plan funds, as well, enabling the other alleged schemes.
Kansas is seeking treble damages, civil penalties of up to $11,000 per violation, disgorgement of misused funds, an accounting of the plan’s assets and a permanent injunction preventing the practices. While the state estimated the total financial exposure reaches the tens of millions, it said the full scope could only be determined through discovery.
“Aetna is committed to safeguarding the money provided by Kansas taxpayers to fund the state employee health plan. We deny these allegations and will defend ourselves vigorously,” Aetna said in a June 29 statement shared with Becker’s.
Claritev clarified it is not a defendant in the case and said it strongly disagrees “with any characterization of our solutions as unlawfully suppressing provider reimbursement or making any final determination with respect to payment,” a Claritev spokesperson told Becker’s. “We also strongly disagree with any inference that Claritev was part of any conspiracy to violate Kansas law or that Claritev acts in coordination with any other healthcare cost management vendors. Claritev does not set reimbursement rates, decide coverage, administer health plans or make final payment decisions for clients.”
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