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San Diego Union Tribune

Aetna to settle suit filed by physicians;

Health plan agrees to pay doctors faster, ease authorizations

by Cheryl Clark, Staff Writer
May 23, 2003

Leading health insurer Aetna Inc. yesterday agreed to settle a class-action lawsuit filed by 700,000 physicians by promising to pay them faster and remove authorization burdens the doctors said delayed and even harmed patient care.
"Aetna has given us the opportunity to bring decision-making back to a process between the doctor and the patient, and other health care plans should follow suit," said Dr. Ronald Bangasser, president of the California Medical Association, which represents 35,000 physicians in the state. "I give Aetna a lot of credit for stepping up."

The doctors and medical groups in more than a dozen states accused Aetna and other large for-profit health plans of conspiring to delay, lower or block reimbursement for physicians' services and interfere with their recommendations for treatment.

"This was about changing their unethical and unscrupulous business practices," said Dr. James Knight, president of the San Diego County Medical Society. "You can imagine how you'd feel if every time you got a paycheck it was something less than what you earned and you had no recourse."

The CMA is one of 19 medical groups listed as plaintiffs in the case.

In the settlement, Aetna agreed to pay $100 million to 700,000 physicians -- roughly $142 per doctor -- and $20 million to establish a foundation to help eliminate racial health care disparities, childhood obesity, improve end-of-life care and address the problem of the uninsured.

It also will set up a committee of practicing physicians to influence Aetna policies.

In announcing the settlement, Dr. John W. Rowe, Aetna chairman and chief executive, said the new policies represent "a sea change in relations between physicians and Aetna that will lead to greater cooperation on critical aspects of quality, availability and affordability of care."

The health plan, which has 13 million enrollees nationally, including 1 million in California and 141,000 in San Diego County, said prompt payment and reduced need for authorization time will translate to $300 million in savings to physicians. Aetna also agreed to pay $50 million in legal fees.

The settlement is expected to be approved by the federal court for the Southern District of Florida this summer and to take effect immediately thereafter.

The lawsuit, filed three years ago under the federal Racketeer Influenced and Corrupt Organizations Act or RICO, alleged that Aetna and eight other large for-profit health plans conspired since 1990 to obstruct claims processing and authorizations for health services.

Cases against other health plan defendants, Cigna Corp., UnitedHealth Group Inc., Wellpoint Health Networks Inc., Anthem Inc., Humana Inc., Pacificare Health Systems Inc., Coventry Health Care and Prudential, have not yet been settled, but several physicians said Aetna's agreement will put more pressure on them to follow.

"This pretty much sets a standard by which other companies will have to come to the table or risk going to trial," said Dr. Ted Mazer of the San Diego County Medical Society.

Physician groups from 13 states complained the health plans failed to provide written explanations of how they reimbursed doctors, frequently changed the rules mid-contract and required physicians' staffs to spend hours on the phone getting authorization for needed procedures, tests or drugs.

Bangasser explained how Aetna's delays affected his practice and patients. Apatient with an acute knee injury needed an MRI, but the plan's review took time, and varied from patient to patient. "Sometimes they'd say (the patient) could get by with just an X-ray, where in my opinion, he couldn't," he said.

Required authorizations and delays also hurt physicians' ability to prescribe some drugs their patients needed, he said.

"The complicated and difficult process in getting a drug that wasn't on the formulary required me or my staff to sit on the phone for half an hour" to get the drug approved, Bangasser said.

"This settlement means the patient won't have to wait months and months for a service while the doctor and the insurance company hash out who owes what," said Mazer. "When I have someone with unilateral hearing loss and suspicion of a brain tumor, I shouldn't have to stop and call and wait all week for someone to call me back to authorize an MRI."

Mazer added that all too often, Aetna would assign a value to a procedure based on a formula, "but wouldn't discuss with us doctors what that is."

Jamie Court of the Foundation for Taxpayer and Consumer Rights in Santa Monica was more skeptical about the settlement's benefits to doctors in California because recent changes in state law protect physicians from health plan retaliation if they inform patients about treatment options not available under the plan.

Rather, he said, the settlement "is about stopping hassles for doctors."

He accused physician groups of using the legal system to improve their own situation while at the same time lobbying Congress to reduce the ability of patients to sue them for malpractice.

"This is an advance for doctors, but it's not a home run for patients," he said. "I'd say it's more like a walk."

But Steven Fisher, deputy director of the state Department of Managed Care in Sacramento, said he thinks the settlement will mean "patients will be put ahead of these (health plan vs. doctor) disputes."
Contact Cheryl Clark: (619) 542-4573; [email protected]