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February 16, 2021

CVS sues former Aetna-turned-Cigna exec over Medicare Advantage trade secrets

Photo | CNN
By Liese Klein

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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