Federal Judge Delays Final Approval of Aetna Settlement With Physicians
U.S. District Judge Federico Moreno on Tuesday delayed ruling on a $470 million settlement between Aetna and about 700,000 physicians nationwide who alleged the insurer improperly denied or reduced payments, the AP/Boston Globe reports. Moreno cited concerns that the payout from a $100 million refund fund could fall below expectations (Wilson, AP/Boston Globe, 10/14). Under the settlement, which received preliminary approval in May, Aetna would admit no wrongdoing but pay physicians $100 million, or an average of $142 each, and spend $20 million to establish a foundation focused on reducing medical errors, childhood obesity and racial disparities. Aetna might also pay $50 million in lawyers' fees. In addition, Aetna has agreed to accept general treatment guidelines developed by the American Medical Association that require the company to base coverage decisions on the recommendations of physicians, rather than on the least expensive treatment among scientifically accepted procedures. The insurer also would create an independent "Billing Dispute External Review Board" to resolve disputes with physicians. According to Aetna officials, those proposed changes to the insurer's practices, which would speed claims processing in addition to giving physicians a greater say in patient care, would cost the company an estimated $300 million to implement (California Healthline, 5/30). During Tuesday's five-hour hearing on final approval, Moreno said that 19 objections to the settlement had been filed with the court and that "[o]ne of the main objections is the doctors don't know exactly what the value of the case is." The AP/Globe reports that practicing and retired physicians who file claims in the suit could collect between $55 and $165 each without submitting paperwork detailing incidents of reduced payments from Aetna. If paperwork showing evidence of reduced payments is not filed, total payouts could be as little as $75 million instead of the $100 million agreed upon. Any balance would be transferred to the medical error foundation fund, which Moreno questioned, according to the AP/Globe.
Attorneys for Aetna and the physicians said they were "optimistic" that Moreno would approve the settlement; the only alternative is to reject it entirely. "We would like to see the settlement approved on its current terms. It is a vastly superior result than could be achieved through continued litigation," Aetna attorney Richard Doren said (AP/Boston Globe, 10/14). The settlement is part of a larger class-action lawsuit filed by physicians in U.S. District Court in Miami against several large health insurers. The lawsuit alleges that Aetna, UnitedHealthcare, Cigna, Coventry Health Care, WellPoint Health Networks, Humana Health Plan, PacifiCare Health Systems and Anthem Blue Cross Blue Shield delayed or denied reimbursements for health services and rejected claims for medically necessary treatments as part of a racketeering conspiracy (California Healthline, 5/30).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.