AETNA: Agrees to Limit Financial Incentives to Texas Docs

      Aetna U.S. Healthcare and Texas Attorney General John Cornyn (R) are expected to announce today a "landmark" settlement that bars the state's largest HMO from offering financial incentives to doctors who stay within set spending limits and from penalizing those who exceed medical budgets. Under the deal -- which absolves Aetna of charges filed in a 1998 lawsuit by the state -- the HMO also agrees to: report any doctors' groups in the plan that offer financial incentives; cut back on "all-products" contracts that require physicians to participate in all Aetna plans; and create an ombudsman program for Texas HMO patients. The settlement "places medical decision-making in the hands of doctors and their patients," according to Cornyn, who added that "Texans can [now] rest assured that doctors won't be penalized for elevating patient needs above HMOs" (Fairbank, Dallas Morning News, 4/11). Aetna hopes the agreement, which also will grant consumers expanded external review of denied coverage claims, will help "mend battered relations with doctors" and patients and "provide flexibility to often-rigid managed care strategies," the Wall Street Journal reports. Arthur Leibowitz, chief medical officer for Aetna, said, "Public confidence is what this is all about." Executives also believe that because Cornyn determined that the company had not committed any illegal acts, the settlement will "defuse the tobacco-industry-style class action lawsuits" recently filed against managed care firms. Aetna Chief Legal Officer David Simon said that the "no wrongdoing" clause of the agreement essentially served as an "'endorsement' of past business practices," driving a "stake in the heart of the factual premise of the class action" and boosting the company's credibility.

National Impact
      The Wall Street Journal reports that the settlement "could set a new standard for the rules governing relationships between managed care companies and the consumers and doctors who do business with them" (Winslow, 4/11). Cornyn already plans to use the agreement as a model for settlements with other HMOs named in the lawsuit, including Humana Health Plans of Texas, PacifiCare of Texas, NYLCare Health Plans of the Southwest and NYLCare Health Plans of the Gulf Coast (Dallas Morning News, 4/11). Leibowitz believes that the deal signals "an important change in health delivery that is going to have an effect throughout the country" (Wall Street Journal, 4/11).