Aetna Goes After Notice Provider Over HIV Disclosure

By Perry Cooper

Aetna Inc. wants a class notice provider to reimburse it for the $17 million it agreed to pay to a class of customers whose HIV statuses were disclosed in notices sent in windowed envelopes.

The insurer sued KCC Class Action Services LLC in the U.S. District Court for the Eastern District of Pennsylvania Feb. 5, alleging KCC mishandled customers’ protected health information.

But KCC struck back Feb. 6. It sued Aetna in the U.S. District Court for the Central District of California, alleging Aetna and law firm Gibson, Dunn & Crutcher LLP failed to protect the information.

KCC denies the allegations of privacy violations, calling them “demonstrably false.”

“KCC deeply empathizes with people affected by this incident and intends to respond to Aetna consistent with the rights and responsibilities related to this matter,” KCC general counsel Drake D. Foster told Bloomberg Law.

Aetna’s attorneys didn’t immediately respond to email requests for comment.

Two Errors

The $17 million deal, announced in court papers filed Jan. 16, will end a proposed class action challenging how Aetna handled protected health information. The deal must still be approved by a federal court.

The patients say Aetna disclosed the health status of 13,487 people without authorization to its attorneys and other parties in the course of settling individual lawsuits over health privacy.

Aetna exacerbated this error, the patients say, by sending benefit notices to nearly 12,000 patients in envelopes with transparent windows that allowed sensitive information—instructions on how to receive their HIV medication—to be visible on the outside of the envelope.

Aetna says in its complaint that KCC is responsible for the second error. It wants KCC to reimburse it for the full $17 million and compensate it for other costs it incurs related to the settlement.

But KCC says Aetna and Gibson Dunn were reckless with the customers’ information and never should have passed it along to KCC. They want Aetna to pay them for their services and absolve them of liability.

Elliott Greenleaf P.C. and Manatt, Phelps & Phillips LLP represent Aetna.

Vedder Price LLP represents KCC.

The cases are Aetna Inc. v. Kurtzman Carson Consultants, LLC , E.D. Pa., No. 18-470, filed 2/5/18 ; and KCC Class Action Servs., LLC v. Aetna Inc. , C.D. Cal., No. 18-1018, filed 2/6/18 .

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.