Health Care

Aetna sues COVID-19 testing companies, alleges fraud

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Aetna is taking a group of related radiology companies to court and accusing them of overcharging for unauthorized COVID-19 tests to the tune of at least $580,000.

The insurer, a subsidiary of CVS Health, filed suit in the U.S. District Court for the District of New Jersey Wednesday. Aetna says Open MRI and Imaging of RP and Vestibular Diagnostics, along with their founder, Salvatore Conte, and executive Eugene DeSimone, sought to profit from the COVID-19 pandemic by transitioning laboratories into testing sites in spring 2020. Conte owns both companies, which share a Rochelle Park, New Jersey, address. The lawsuit says Conte and DeSimone incorporated two new firms, Universal and Integrated Wellness, at the same address to spread out their testing charges and avoid scrutiny.

Open MRI and Imaging of RP did not immediately respond to an interview request and Modern Healthcare was unable to reach Vestibular Diagnostics.

Aetna’s claims mirror those made by Horizon Blue Cross Blue Shield, which is also suing Open MRI and Imaging of RP and Vestibular Diagnostics. These radiology companies have also sued Cigna, accusing the health insurer of wrongfully denying payment for nearly $400,000 in COVID-19 tests. Those cases are ongoing.

DeSimone and Conte are trained as physicians but had their medical licenses suspended as a result of prior healthcare fraud. In 2015, the Justice Department sentenced DeSimone to 37 months in prison for accepting bribes from a medical laboratory in exchange for referrals for blood tests that were then billed to Medicare and private insurers. In 2017, the federal government sentenced Conte to three years of probation and a $50,000 fine for a similar patient-referral scheme.

According to Aetna, Open MRI and Imaging of RP and Vestibular Diagnostics billed for rapid COVID-19 tests at unlicensed facilities. The insurer further alleges that the labs misrepresented the type of tests administered and charged for specimen-handling fees that only apply to PCR tests. Clinicians also upcoded claims, and some bills predated the new companies’ formation, according to the complaint.

Drs. Raymond Reiter, Doney Jain, George Pemberton and Colin Hermann are also named as defendants for allegedly administering the tests.

Aetna is accusing the facilities and doctors behind them of insurance fraud, common law fraud, negligent misrepresentation, unjust enrichment and civil conspiracy. The company is also suing St. Irene Realty, which is owned by Stephen Conte Jr., of aiding and abetting insurance fraud. The lawsuit does not describe what family relationship, if any, exists between Stephen Conte Jr. and Salvatore Conte.

Vestibular Diagnostics is apparently transferring all of its cash to Stephen Conte Jr., in an effort to appear insolvent and avoid paying back Aetna for fraudulent charges, the lawsuit says.

The insurer seeks to be reimbursed for claims paid, the expenses from the suit and its investigation, attorneys’ fees, treble damages and any other costs the court deems appropriate. Aetna also wants an injunction to stop Vestibular Diagnostics from shifting its assets to Stephen Conte Jr. during the trial. The insurer is seeking a jury trial.

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