Process delayed in Aetna lawsuit settlement

A class action lawsuit against health insurance company Aetna has apparently been settled out of court. In December, it was announced that Aetna agreed to settle a class action lawsuit filed against it in 2009 by a consortium of health and mental health care associations and patients for $120 million.

The lawsuit alleged that Aetna relied on a flawed database created by Ingenix, a company owned by UnitedHealth Group, to determine reimbursement rates for health care professionals submitting as “out-of-network providers.” The Aetna lawsuit alleges that the Ingenix Database was, in fact, a conspiracy by most of the country’s largest health insurance companies to “manipulate the rates used to reimburse members” for out-of-network services.

The lawsuit also claimed that Aetna hid its use of a health-care owned database to determine reimbursement rates and that it contributed data to the database after deleting high charges to artificially keep rates low. Ingenix routinely deleted other high charges from the database as well, the lawsuit claimed.

“Simply stated, Aetna and Ingenix ‘cooked the books,’” states the lawsuit filed by Whatley Drake & Kallas, LLC, a New York law firm.

A representative from Aetna did not respond to requests for comments on this story.

A similar lawsuit against United HealthCare was settled in 2009 for $350 million. Several other cases against companies that used the database are still on-going including one brought by the California Psychological Association against WellPoint BCBS.

The lawsuit, filed on behalf of providers and policy holders, included the American Medical Association, along with the New Jersey Psychological Association and other medical associations and societies.

“This settlement focuses on compensating psychologists and other providers, as well as patients for past underpayments,” says Alan Nessman, J.D., of the American Psychological Association’s Legal and Regulatory Affairs Office. “The overall mass of Ingenix cases, including the settlement with the N.Y. Attorney General, has generally resulted in the elimination of the allegedly unfair and non-transparent “black box” of the Ingenix system for determining out-of-network payments and its replacement with bases for reimbursement that are much more transparent and that do not have the hidden means of artificially reducing payments that the Ingenix system was alleged to have.”

The low reimbursement rates resulted in higher medical costs for patients who were expected to make up the difference.

At this point, the settlement awaits final approval from the courts. There has been a delay in the approval, says Nessman, because questions have been raised about the judge ruling over the case.

“The settlement has not been finally approved by the court or even preliminarily approved,” says Nessman. “The process has been delayed by motions related to the question whether the judge should recuse himself based on his recent discovery that he had been insured by Aetna.”

When (and if) the settlement is approved by the court, the financial commitment agreed upon by Aetna will be used to reimburse health care practitioners who were affected by Aetna’s “out of network” payments from June 2003 through 2012.

Providers will be able to make one of two types of claims – either an application to the general fund where they need only demonstrate that they were out-of-network providers for Aetna during the coverage years (2003-2012) or a more in-depth application to a “prove-up” fund. With the general fund, applicants will receive a flat $40 per year. For practitioners who can substantiate claims with documentation that they were not reimbursed by patients for balance-billing, there is no limit to the reimbursements except where claims go beyond the amount of the total agreement.

“We assume that thousands of psychologists nation-wide will be eligible to participate in the settlement,” says Nessman. “We expect that most psychologists will use the easy claims process. Practices with more significant claims volume and good records will want to submit more detailed proof to the Provider Prove-Up Fund.”