Group Health settles suit
Group Health Cooperative, Seattle, has agreed to pay as much as $10 million in member refunds to settle a class-action lawsuit claiming the HMO violated state law by denying coverage for alternative treatments. The lawsuit, filed in 2001, challenged Group Health's requirement that members exhaust traditional treatment options before being reimbursed for alternative medicine and its strict requirements for referrals from traditional physicians.Three other Washington state health insurers have paid a combined $36.2 million in the past two years to resolve similar claims. The settlement is the last in a series of suits to enforce the state's landmark 1996 "Every Category of Provider" law, which requires insurers to cover all types of licensed care that is useful and cost-effective. A challenge by insurers arguing that expanding the list of approved providers would drive up premiums was rejected by the state Supreme Court.
Aetna gets good, bad news
Aetna, Hartford, Conn., achieved a fourth-quarter profit while relinquishing its position as the nation's second-largest health insurer. Since the arrival of Chairman and Chief Executive John Rowe in September 2000, the company enacted double-digit premium increases and cut overhead while shedding unprofitable business to reverse losses. Total membership dropped 20% last year to 13.7 million and is expected to fall to 13 million by March 31. As a result, the company-which gave up the top spot to 17.6 million-member UnitedHealth Group only last year-would drop to No. 4 after Cigna Corp., Philadelphia, and WellPoint Health Networks, Thousand Oaks, Calif., both of which have at least 13.1 million enrollees. Aetna said it will begin expanding later this year. The company earned $98.2 million, or 63 cents per share, in the three months ended Dec. 31, compared with a loss of $187.6 million, or $1.30 per share, in the same period a year earlier. Revenue fell 22% to $4.7 billion.