Aetna Settlement Overview

(Agreement dated May 21, 2003 - Final Approval by Judge Moreno Oct. 24, 2003)

The following is a general overview of the major provisions of the Aetna Settlement likely to be of interest to  physicians.  It is not intended to be comprehensive.  The prospective relief noted below generally extends for four (4) years from the date of preliminary approval, unless terminated earlier as specified in the Agreement.  All provisions set forth below are currently effective. Because of Aetna's recent agreement to extend the Settlement for one year (with the exception of the External billing dispute resolution process and the provision requiring acceptance of assignments), these will remain effective until June 2, 2008.  Physicians interested in the specifics should read the language of the  actual Settlement Agreement .

Retrospective Relief:

• $100,000,000 to class members, without any requirement for the submission of medical records.  (§8)
• $20,000,000 to a Foundation controlled by the Medical Societies that initiated the litigation to create interactions to improve the quality of health care in the country.  (§8)
• All retrospective relief has been fully distributed.

Prospective Relief: $300 million

• Better Medical Necessity Definition - Patients will be entitled to receive medically necessary care as determined by a physician exercising clinically prudent judgment in accordance with generally accepted standards of medical practice, and cheaper alternatives are permissible only when they are "at least as likely to produce equivalent therapeutic or diagnostic results."  (§7.16)
• Payment of Vaccines and Vaccine Administration - Recommended vaccines and injectibles and the administration of such vaccines and injectibles, will be reimbursed.  (§7.14)
• Reduced Downcoding - Evaluation and management codes will not be automatically downcoded.  (§7.19)
• Fairer Payment Rules - CPT reimbursement coding edits will comply with almost all of the guidelines contained in the AMA CPT Manual.  (§7.20)
• Disclosure of Fee Schedules - Physician fee schedules will be available on the Internet by December 31, 2004. (§7.3)
  • Fee schedules can be changed once a year only.  (§7.14)
• Disclosure of Payment Rules - Payment rules will be consistent across all company products by December 31, 2004.  (§7.8(a))
  • A Web-based pre-adjudication tool will be available on the Aetna Website so that physicians can determine what they will be paid.  (§7.8)
  • Reimbursement edits and claims adjudication logic will be disclosed.  (§7.8)
• Capitation from Date of Enrollment - Capitation fees will be paid when the patient chooses a PCP or is assigned to a PCP, retroactive to date of enrollment.  (§7.28)
• Participation in Pharmacy Risk Pools Optional - Aetna's contracting policies will not require the use of pharmacy risk pools.  (§7.29)
• Stop-loss Insurance May be Purchased Elsewhere - Aetna will not restrict physicians from purchasing stop-loss coverage from other insurers.  (§7.29)
• Faster Credentialing - New physician group members will be credentialed within 90 days of application, which physician groups can submit prior to their employment.  (§7.13)
• Arbitration Fees Capped - Arbitration fees for solo and small group physicians will be capped at $ 1000. (§7.29)
• Prompt, external dispute resolution mechanism for physician disputes - A streamlined, external review system will be established enabling physicians to dispute Aetna's decisions on billing or medical records requests (Billing Dispute External Review Board) and on medical necessity (Medical Necessity External Review Process).  (§§7.10, 7.11)
• Gag clauses prohibited - "Gag" clauses will be prohibited.  (§7.29)
• Non-participating physicians protected - Disparaging language will be removed from EOBs , and the Agreement will not change or alter the rights of non-participating physicians to balance bill patients or to avoid dealing with Aetna. (§§7.21 and 7.29)
• No HIPAA Mandate - Non-participating physicians will not be forced to use electronic transactions or otherwise become HIPAA compliant, and Aetna agrees to continue to accept paper claims.  (§7.17)
• Better state law supercedes the Agreement .  (§7.29)

Enforcement of Settlement Agreement

• A Physicians' Advisory Committee will be created to address issues of nationwide scope.  (§7.9)
• Physicians and signatory state medical societies will enforce the Agreement, including Aetna's agreement to abide by those laws that are more protective of physicians than the provisions otherwise contained in the Agreement, exclusively through an efficient dispute resolution process.  The United States District Court Judge handling the litigation will have ultimate enforcement power.  (§12)
• Physicians and signatory state medical societies retain the right to seek the enactment of better state laws and regulations, and to enforce those better protections in the courts.  (§13(h))

Coverage:

• The settlement covers all physicians (over 700,000 physicians, physician groups and physician organizations) who have provided covered services to any person enrolled in or covered by a plan offered or administered by any of the defendants named in the complaint (including Aetna, CIGNA, Prudential, Humana, WellPoint, Pacificare , HealthNet , Anthem, United and Coventry). 
• The settlement also includes the following 19 Signatory Medical Societies: Alaska, California, Connecticut, Denton County (TX), El Paso County (CO), Florida, Georgia, Hawaii, Louisiana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Northern Virginia, South Carolina, Tennessee, Texas and Washington.