The California Supreme Court ruled that the state's medical association has standing to sue Aetna's operations in California for allegedly interfering with the medical judgment of physicians who refer patients to out-of-network providers.
In an opinion issued by the court July 17, the justices sided with the California Medical Association's argument that Aetna's referral policy threatened the organization's mission of promoting physicians and public health, therefore granting it the ability to sue the CVS Health subsidiary under a state competition law.
In 2004, California voters chose to amend the state's Business and Professions Code to restrict which entities can sue over unfair competition policies that lead to injuries, lost money or property.
In 2009, Aetna adopted a new policy meant to reduce out-of-network referrals and threatened action against in-network providers who refused to comply with the new policy.
In 2012, the CMA sued Aetna over the new referral policy for allegedly violating the amended competition law, arguing that the association had to dedicate up to 250 hours of staff time and other resources to analyze and respond to the policy.
A trial court ruled in favor of Aetna and said the CMA could seek an injunction against the policy only if it was harmed directly, not just if its members were harmed. Aetna had argued the CMA was not financially harmed and there was no direct contract between the two organizations. The trial court's decision was later reaffirmed by an appeals court, but the California Supreme Court's new ruling holds that the CMA does have standing to seek an injunction against Aetna.
CMA's response to the referral policy "required reallocation of staff time and other resources from other ongoing projects, giving rise to the economic injury that supports standing here," the court wrote. "CMA presented sufficient evidence to, at the least, create triable issues of fact on these points."
Becker's has reached out to Aetna and will update this article if more information becomes available.