AETNA I: Moves To Ease AMA Concerns About Contracts
In the face of staunch criticism from the American Medical Association, Aetna U.S. Healthcare is rewriting 300,000 physician contracts to address concerns about "gag clauses" and patient privacy, the Wall Street Journal reports. Specifically at issue in the disputed contracts and absent in the new agreements are clauses that doctors claim "hinder[ed] their freedom to freely discuss treatment options, especially any that aren't covered" by Aetna, barred them from disclosing Aetna's reimbursement policies and gave the company shared ownership of patient records. Aetna CEO Richard Huber, wary of the controversy and criticism over the physician agreements, "urged officials ... to recast the contracts in 'friendlier language.'" Aetna had become "a prominent target of complaints about managed care" after an 11-page complaint was filed by the AMA in February and a spate of "flareups in Texas and other states where some doctors have resigned from Aetna health plans." David Simon, chief legal officer for Aetna, said the new contracts "use 'common words, plain language' and reflect an effort to 'bend over backwards to eliminate the possibility that anyone could misconstrue the agreements." However, the Journal reports that the "new language doesn't yield ground to the doctors in every case." Under the new contracts, Aetna would maintain access -- if not ownership -- to patient records, and maintains the unpopular requirement that doctors must participate in all Aetna plans, regardless of their respective compensation packages (Winslow, 10/20).
In separate news, the Hartford Courant reports that New York Life Insurance Co. has filed suit accusing Aetna of "hampering New York Life's attempts to determine" the true value of NYLCare Health Plans, which Aetna purchased this year for $1.05 billion. The agreement between Aetna and New York Life "had a routine provision for [the $1.05 billion] figure to be adjusted after further review." Aetna is seeking to reclaim some of the $1.05 billion because it claims "the value of NYLCare, as shown by shareholder equity, was not as high as was indicated on the balance sheet at the closing of the deal." But the suit alleges that "Aetna has refused to let New York Life copy essential documents and failed to provide requested information." Aetna spokesperson Joyce Oberdof said "We remain pleased with the acquisition," but the suit "is absolutely without merit and ... clouds the issue at the heart of matter -- the process that was agreed to in the original purchase agreement." Analyst Todd Richter of Morgan Stanley Dean Witter said, "Aetna is finding out now that the NYLCare book of business is perhaps not as profitable as they said it was going to be" (Levick, 10/20).