North Cypress (Texas) Medical Center and its CEO engaged in an illegal kickback scheme and used deceptive billing practices that led Aetna Life Insurance to overpay the physician-owned community hospital by as much as $120 million, according to allegations in a lawsuit filed by the insurer.
According to the complaint filed by Aetna, the hospital's annual gross revenues exceed $1.5 billion a year — "an amount that is more than twice that of other nearby hospitals that have substantially more patient volume and provide a wider array of medical services."
Aetna alleges North Cypress achieved its financial success through a fraudulent billing scheme with Robert Behar, MD, CEO of North Cypress, acting as the mastermind.
The scheme allegedly involved North Cypress engaging in a number of illegal acts, including paying kickbacks to physicians for patient referrals and using improper billing techniques.
In addition, by charging exorbitant fees, North Cypress was able to advertise its facility as having "an upscale five-star hotel-like ambience," according to the lawsuit.
Through the hospital's use of fraudulent billing methods and allegedly orchestrating an out-of-network business strategy, Aetna claims it has overpaid North Cypress as much as $120 million since Jan. 1, 2009.
Karen Hinton, a spokesperson for North Cypress, says the hospital believes Aetna's lawsuit is part of a "scheme to sue out-of-network providers throughout the nation to coerce them into financially burdensome in-network contracts with Aetna." Ms. Hinton also says North Cypress "specifically adheres to all federal regulations."
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