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Aetna Agreement Could Affect Health Plan Administrators

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NU Online News Service, May 29, 2003, 5:43 p.m. EDT – Aetna Inc., Hartford, has received preliminary approval from U.S. District Court Judge Federico Moreno for a proposed settlement agreement that could resolve litigation with more than 700,000 doctors, according to an announcement from the lawyers who have organized the litigation.

The litigation organizers have filed suits accusing Aetna and other managed care companies of working together to confuse doctors, negotiate unfair provider contracts, and lower and delay payments to doctors in unreasonable ways.

The proposed settlement agreement calls for Aetna to make some changes that could affect employers, benefits administrators and benefits technology companies.

Aetna has agreed to improve the accuracy of information about whether patients actually have health coverage by persuading more employers to transmit eligibility information to Aetna in an electronic format and transmit eligibility information to Aetna more often.

Aetna also has agreed to persuade large benefits administrators to give it more accurate eligibility information. Aetna is supposed to track administrators’ speed at removing terminated plan members from plan eligibility files and help develop systems that will extract eligibility information directly from employer payroll systems.

A direct payroll extraction system should “reduce the turnaround time for transmitting such information and the likelihood for errors,” according to the agreement text.

Other agreement provisions call for Aetna to pay $100 million to the doctors, or about $140 per doctor; to contribute $20 million to a health quality foundation; to pay $50 million in legal fees; to set up an independent billing appeals process; and to give doctors more information about how it handles medical claims.

Aetna has accepted the agreement to resolve its share of the managed care lawsuits now being heard in Miami. Lawyers began organizing suits in 1999. The federal courts put many of the suits under Moreno’s jurisdiction in October 2000.

Moreno plans to hold a hearing on final judicial approval of the settlement agreement Oct. 13.

Doctors who want to opt out of the agreement must do so by Aug. 29, and parties that want to object must file their objections by Sept. 12.

A link to the text of the proposed settlement is posted at