At first glance, this spring's settlement between Texas Attorney General John Cornyn and AetnaUSHealthcare seemed to be good news for physicians. In the months following the announcement of the settlement, however, providers across Texas have lined up to voice their disappointment in the settlement and now are calling for its revision.
The settlement is supposed to be implemented this month.
In April, Aetna agreed to settle a 1998 lawsuit, brought by the former attorney general, that accused the insurer of providing improper financial incentives to physicians. In agreeing to the settlement, known as the Assurance of Voluntary Compliance (AVC) and heralded as a victory for consumers, Aetna admitted no wrongdoing but promised to comply with state law. The insurer and Cornyn touted the settlement as a groundbreaking deal that could be used as a national model.
For Aetna, which has been accused of shaving nickels and dimes at the expense of patient care, the settlement seemed to offer much-needed positive public relations.
Providers, however, are not warming up to the settlement. Earlier this summer, the Texas Medical Association and the AMA sent Cornyn a joint letter outlining their concerns about the AVC.
Kim Ross, chief lobbyist of the TMA, says the letter asks the attorney general for a "cleaning up and clarifying of quite a number of ambiguities in the AVC," he says. "The attorney general and his attorneys frankly do not have the requisite experience in this area to understand how the language in an agreement like this with this company can be operationalized to the benefit of the plan and the detriment of the medical community."
After the AVC was announced, Mississippi attorney Richard Scruggs, who won fame prosecuting big tobacco and who recently filed a series of class action suits against managed care companies, also voiced his concern about the AVC. Scruggs, who leads an insurance industry reform group, refers to the AVC as a "sweetheart deal" for Aetna. In a prepared statement, Scruggs argued that the AVC is "chock full of loopholes, imprecise wording and contradictory language that give Aetna plenty of wiggle room to avoid the changes that are really necessary to put patient care before market share."
One of the providers' main concerns is that the AVC does not properly define who determines medical necessity. The TMA-AMA letter expressed concern that the AVC's definition of medical necessity is too close to Aetna's existing definition, which allows the insurer to override the decision of a treating physician.
"The AVC leaves the medical necessity decision squarely in the hands of Aetna with no stated role for the treating physician," the letter reads. "A medical necessity determination without a clear role for the treating physician is harmful to patients and physicians."
Allan Chernoz, M.D., regional medical director for AetnaUSHealthcare in Texas, points out that physicians are making medical necessity determinations.
"Previous statements have implied that until AVC came along, nonphysicians were making medical necessity decisions for Aetna. That's not true," he says. "We have a licensed physician who examines the facts and, using the definition of medical necessity that we've agreed to, makes a determination."
Providers' concerns also center on the AVC's definition--or lack thereof--of improper financial incentives and Aetna's use of an all-product clause.
According to the TMA, the AVC did not effectively eliminate the all-product clause.
A spokeswoman for the attorney general says the office is reviewing the AMA-TMA letter and is drafting a response, but Chernoz expects the AVC to be implemented as scheduled. "I continue to think that the AVC represents a settlement that is good for our participating physicians and makes a number of significant changes."