Aetna has asked a federal court to issue sanctions against a large neonatal services supplier, alleging the company failed to protect records relevant to a $50 million billing dispute.
The Hartford, Conn.-based insurer filed a memorandum to the U.S. District Court of Pennsylvania on Monday, saying that Mednax failed to save thousands of emails related to claims that it was overcharging Aetna for services, despite knowledge of Aetna’s legal complaint. Mednax’s internal billing and coding system, named BabySteps, automatically deletes emails after 90-days unless lawyers place a “litigation hold” on the correspondence.
Charlie Lynch, senior vice president of finance and strategy at Mednax, said the company disputes the claims leveled in Aetna’s motion and plans to file a brief in response soon.
“Mednax has not destroyed or otherwise spoliated evidence in this case, which is itself without basis,” Lynch wrote in an email.
Aetna declined to comment on the pending lawsuit.
According to Aetna’s complaint, in January, 2015, the insurer contacted Mednax over a suspicion that the company was exaggerating the severity of the clinical condition of its newborn patients and ordering unnecessary tests.
Over the next year, Aetna said it met with Mednax multiple times to share a statistical analysis of the company’s billing practices. In response, the lawsuit states that Mednax hired numerous outside lawyers, who met with Mednax’s in-house counsel to discuss litigation holds, among other things.
Aetna says lawyers told the insurer that pausing the system that automatically deletes emails “slipped through the cracks.”
“Mednax, a sophisticated and publicly traded company, cannot avoid significant spoliation sanctions simply by saying that the issue ‘slipped through the cracks,’ particularly given that Mednax refuses to even reveal the content of the alleged investigation that led to this conclusion,” the complaint reads.
As a result of Mednax deleting the emails, Aetna said it is “severely prejudiced” and asked the court to implement adverse inference, which means it may hold Mednax’s silence against it.