First Line of Defense: Physicians Must Be Vigilant

 in Aetna Settlement

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Law Feature - September 2005  


By  Erin Prather
Associate Editor  

An agreement is not a guarantee. Aetna agreed to change its business practices when it settled its portion of the federal antiracketeering lawsuit against for-profit HMOs by the Texas Medical Association and other state medical societies. But it's up to you to help hold Aetna's feet to the fire and file a compliance dispute complaint if you find that Aetna is violating the terms of the settlement of the lawsuit, which was filed under the Racketeer Influenced and Corrupt Organizations Act (RICO).

In agreeing to change how it handles physician reimbursement, Aetna said it would simplify claims submission and processing and reduce administrative burdens on doctors and their staff. You should file a complaint if it doesn't. The forms you need are posted on the HMO Settlement Web site at

Harris County Medical Society President Robert C. Vanzant, MD, knows all about billing disputes. This past spring, his office sought reimbursement for giving the conjugated meningitis vaccine to his patients. After determining that Aetna had underpaid him for the vaccine for several months, Dr. Vanzant filed an external billing dispute. That claim is pending.

"I've told my colleagues that they have to go through, figure out where the problem is, and file a complaint," he said. "Most always say, 'I don't have time to do that.' I tell them no one else is going to do it for them; they have to take the time or they are not going to get paid. Take the time to do it. An hour here is going to save you money in the long run."

It is imperative that you make sure all your future Aetna contracts include language that guarantees the proposed contract does not waive or conflict with any of the business practice initiatives Aetna agreed to in the settlement. TMA officials met with Aetna last summer and, after a series of negotiations involving key TMA leaders (then-President Bohn Allen, MD, and President-Elect Robert T. Gunby Jr., MD) and staff, Aetna substantially revised its contracts to be consistent with Texas law.

In addition, TMA and other state medical societies active in the RICO Settlement Compliance Work Group are supporting further revisions to assure the Aetna contract also meets all the provisions in the RICO settlement. TMA General Counsel Donald P. Wilcox, JD, anticipates a new addendum to the Aetna contract to be sent to physicians shortly.

If you discover language in your Aetna contract that is inconsistent with the settlement, seek a modification and consider the mediation process under the settlement. TMA, as a signer of the settlement, can assist you with compliance issues. A compliance dispute facilitator will represent you at no cost if she agrees with your position. Leaving inconsistent language in the contract you sign can confuse the issue and may unknowingly affect your rights under the settlement.

It should also be noted, Mr. Wilcox says, that the lawsuit settlement says that physicians get the advantage of state law or the provisions of the settlement, whichever is more favorable to physicians.

WellPoint, Health Net, and Prudential Financial have also decided to avoid a court battle and settle. Physicians electing to file a claim with Health Net to obtain their share of the settlement should do so now because Sept. 21 is the deadline. Prudential, which sold its health insurance business to Aetna, has agreed to pay $22.05 million to the trust fund to be used to enforce the settlements in the RICO case and to address future abusive practices unfairly interfering with the physician's right to be paid for his or her services. Details are online at

The hearing on final approval for the Health Net and Prudential settlement is set for Sept. 19. The WellPoint settlement has been preliminarily approved also, with a final approval pending.

The trial for the remaining defendants is scheduled for January in a Miami federal court. They include Coventry Health Care Inc., Humana Inc., PacifiCare Health Systems Inc., and UnitedHealthcare. 

Compliance Disputes Work  

Julia Smeds Stewart, JD, a Birmingham, Ala., attorney and the compliance dispute facilitator for the Aetna and CIGNA settlements, has summarized how Aetna is complying with the settlement. She cited several "success stories," including:

  • Several compliance disputes were filed because Aetna failed to pay for CPT code 76083 (computer-aided detection for screening mammography) in violation of the settlement. Aetna thus began paying for the procedure as of April 1, 2005.
  • Aetna agreed to pay for CPT code 78480 (myocardial perfusion study) effective June 15, 2005, after it was challenged by numerous compliance disputes, and after the issue came before the settlement's Physicians' Advisory Board.
  • Aetna agreed to extend many of the terms of the settlement for an additional year, to June 3, 2008, after issues were raised by the Settlement Compliance Work Group and after the executive directors of the California and Connecticut state medical societies met with Aetna President Jack Rowe, MD, to complain about Aetna's failure to comply with the settlement agreement.
  • Other disputes continue in "confidential" mediation. Once these are resolved or appealed to the dispute resolution officer, they will be discussed in future communications.

Erin Prather can be reached at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629.



RICO Settlements At-a-Glance
(As of July 21, 2005)


Physician Cash Recovery  

Physicians' Foundation Funds  

Ensuring Continued Health Plan Accountability  

Prospective Relief  

Final Approval Dates  


$100 million

$20 million


>$300 million



$70 million

$15 million


>$400 million


Health Net  

$39 million


$1 million

>$80 million

Hearing scheduled 9/19/2005




$22 million


Hearing scheduled 9/19/2005


$135 million

$5 million


>$250 million

Hearing scheduled 12/2/2005


$344 million  

$40 million*  

$23 million  

>$1.3 billion  


* Physicians' Foundations for Health Systems Excellence and Health Systems Innovations  have more than $100 million as a result of physicians' charitable contributions of their cash recoveries.



What to Look For

Here are the highlights of the prospective relief for physicians as provided by the Aetna and CIGNA settlements in the national antiracketeering class action lawsuit. For more details, see  "Prospective Relief"  on the TMA Web site.

Billing, Coding, and Payments  

  •  No automatic downcoding of evaluation and management codes. 
  •  Comply with most CPT conventions and guidelines. 
  • Recognize and pay for modifiers 25, 57, and 59, with appropriate documentation.
  • Handle modifier 51-exempt, add-on, and indented codes per CPT guidelines.
  • Share fee schedules and preadjudicate claims online.
  • Electronic clean claims paid in 15 days, paper clean claims in 30 days.
  • Interest paid for late payments.
  • All-products clauses virtually eliminated.
  • New physician group members credentialed in no more than 90 days.
  • No mandatory electronic transactions.
  • Nonparticipating physicians still may balance-bill patients.

Medical Necessity Determination  

  • Patients entitled to medically necessary care as determined by a physician exercising clinically prudent judgment in accordance with generally accepted standards of medical practice.
  • Less costly alternatives allowed only if "at least as likely to produce equivalent therapeutic or diagnostic results." 

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