Humble Surgical Hospital in Texas has filed for bankruptcy after a federal court ordered the provider to pay Aetna $51.4 million for scamming the insurer by collecting windfall profits from having patients use out-of-network services.
Humble allegedly paid doctors kickbacks of 30 percent of facility fees to 103 physicians in exchange for their referrals to out-of-network services, according to court documents. Humble allegedly charged patients in-network rates but billed the insurer at out-of-network rates.
The kickbacks were paid out of money it billed Aetna, according to ruling handed up earlier this month in the U.S. District & Bankruptcy Court for the Southern District of Texas.
Humble waived the patient's share of the bill and promised patients their out-of-pocket expenses would be equal to or less than in-network, according to court documents.
Humble filed for bankruptcy reorganization under Chapter 11 on Friday, according to the Houston Chronicle. The five-bed specialty surgical hospital will remain open.
In its bankruptcy petition, Humble certified it had liabilities of at least $50 million, assets of at least $10 million and between 200 and 999 creditors.
On Friday, Aetna reportedly asked the Judge Lynn Hughes to remove the bankruptcy proceedings from bankruptcy court and to preside over the case himself because of his years-long involvement with the case and his familiarity with Humble's billing practices, according to Law360.
Humble is not part of Aetna's network. Aetna sued Humble in 2012, alleging the provider was charging 10 times the market rate for out-of-network procedures.
The court awarded Aetna $41 million, and an additional $10 million in interest.
Cigna was involved in a similar lawsuit against Humble Surgical Hospital, seeking $5 million to recover alleged overpayments, but in that case, the judge ruled in the provider's favor.
Federal Judge Kenneth Hoyt dismissed all claims by Cigna and found no evidence of improper billing for care and services by the hospital, according to the Humble website.