Federal Judge Approves Settlement of Aetna Lawsuit Filed by Physicians
U.S. District Judge Federico Moreno on Friday gave final approval to a $470 million settlement between Connecticut-based Aetna and about 700,000 physicians nationwide who alleged that the insurer improperly denied or reduced payments, the Hartford Courant reports. Under the settlement, Aetna will pay $100 million to doctors, pay for $43.5 million in plaintiffs' legal fees and $6.5 million in expenses, donate $20 million for a new health care foundation and make changes in payment administration and physician relations valued at about $300 million (Levick, Hartford Courant, 10/25). Specifically, Aetna has pledged to reimburse electronically filed claims within 15 days, to not change its fee schedule more than once annually and to not "downcode" claims to prevent full payment for services deemed medically necessary, according to Reuters (Reuters, 10/24). The final settlement approval came after Moreno on Oct. 14 delayed ruling on the settlement because of concerns that the payout from a $100 million refund fund could fall below expectations (California Healthline, 10/15). Doctors could collect payments of $55 to $210 each (Reuters, 10/24).
Moreno said the settlement will require Aetna "to eliminate the worst of the improper practices involved in managed care," noting that he had overruled most of the 19 objections to the settlement and two had been withdrawn (Hartford Courant, 10/25). Aetna Chair John Rowe said, "This agreement will reduce administrative complexity and lead to changes in the health care system that will ultimately benefit patients" (Associated Press, 10/25). Tim Norbeck, executive director of the Connecticut State Medical Society, said, "From this day forward physicians and their patients will find it much easier to navigate what was unfortunately a hostile and complex managed care system" (Reuters, 10/24). The deal is expected to lower the insurer's second-quarter earnings by $75 million, Bloomberg/Philadelphia Inquirer reports. Officials from eight other insurance companies who face similar allegations from physicians said they do not plan to settle claims (Feeley, Bloomberg/Philadelphia Inquirer, 10/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.