By Liese Klein February 16, 2021
The defection of a top Aetna executive has prompted parent company
CVS to sue Cigna in Rhode Island district court alleging the potential misuse
of trade secrets.
Timothy M. Brown, described in the filings as a "highly
compensated former regional Chief Medicare Officer,” left Aetna on Jan. 22 for
Cigna after helping his former employer develop its Medicare Advantage strategy
for the 2022 plan year. CVS and Aetna merged in 2018, and Aetna President
Karen S. Lynch became president and CEO of parent CVS Health Corp. on Feb. 1.
Brown was part of strategy meetings as one of 15 regional managers
for Aetna’s Medicare Advantage (MA) program, a lucrative line of business for insurers. According to the Kaiser Family Foundation, gross
margins for MA plans averaged $1,608 per covered person per year between 2016
and 2018 – about double the average for plans in the individual and group
markets.
Aetna’s strategy for capturing more of this market was “highly
confidential and would be invaluable to Cigna,” according to the lawsuit, which
was filed Feb. 9.
The lawsuit accuses Brown of breach of contract and potential
misuse of confidential trade secrets, including Aetna's plans for MA expansion,
marketing and regional strengths and weaknesses.
“With his knowledge of Aetna’s market expansion strategy,
products, and competitive positioning, Brown could do significant competitive
damage to Aetna,” the lawsuit reads.
According to the lawsuit, Aetna tried to negotiate with Brown and
Cigna “to achieve an accommodation that would permit Brown to work in Cigna’s
Medicare business while adequately protecting Aetna’s legitimate business
interests.” Cigna refused and maintained Brown’s right to take a job with input
into his new employer’s national MA strategy, the suit said.
“Since it is inevitable that Brown would use Aetna’s confidential
Information in such a role, Aetna has been left with no alternative other than
to seek the relief requested from the court,” the filing read.
Aetna is asking the court for punitive damages, legal fees and an
order to prevent Brown from working at Cigna for a year.
Cigna declined to comment on the lawsuit.
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