U.S. District Judge Federico Moreno in Miami has given preliminary approval to the new settlement agreement between Aetna and 16 state medical societies involved in a class action lawsuit against the Hartford, Conn.-based health insurer and several other health plans.
In a 45-minute hearing this morning, Moreno heard objections to the agreement from eight plans that have not settled the medical societies' lawsuits over payment issues, says Kent Jarrell, a spokesperson for the other plans.
A key objection, Jarrell says, is a provision in the agreement saying plaintiffs will use their "best efforts" to obtain similar agreements--involving a variety of changes in payment rules and appeals mechanisms--from the other plans.
Jarrell says the other plans expect to raise their objections again later in the settlement process.
The settlement, announced May 22, is between Aetna and medical societies in Alaska, California, Connecticut, Florida, Hawaii, Louisiana, Georgia, New York, New Jersey, Nebraska, New Hampshire, North Carolina, South Carolina, Tennessee, Texas and Washington.
Attorneys for the medical societies say notices will be sent out in the next few days to 700,000 physicians who did business between 2000 and 2002 with Aetna or with any of the other health plans being sued. The notices will contain an explanation of the agreement and ask physicians if they want to opt out of it or apply for their part of a $100 million payout from Aetna that will be distributed to doctors when the agreement is final.
Payment will be based on a formula that will provide the most money to physicians with $50,000 or more in claims from 2000 to 2002 against Aetna, according to the agreement.
Attorneys say physicians will have until Aug. 29 to either opt out or send in a claim form. If they do nothing, they will remain a part of the settlement but will not receive any funds, the lawyers say.
On Oct. 13, Moreno will hold a "fairness hearing," at which time he will review objections to the proposal, the attorneys say.
Archie Lamb, co-lead counsel for the plaintiffs, says if Moreno sees no need to change the document, he likely will approve it at the October hearing and it would go into effect immediately.
In addition to the payout, the document provides for a wide variety of changes in rules for payments to physicians, such as strict limits on bundling and downcoding of claims, rules on deciding "medical necessity" to determine coverage and procedures to appeal Aetna's coverage decisions.
Jarrell says the other defendant plans, which include United HealthCare, Humana and WellPoint, are not in settlement negotiations with the medical societies. He adds that they expect to overturn Moreno's class certification of their lawsuits in oral arguments before the 11th Circuit of the U.S. Appeals Court on Sept. 11.
Jarrell says the appeals court probably will take more than a month to issue a ruling. If the court rules that the lawsuits cannot be class actions, he says it probably will be too late to affect the class action Aetna settlement, which is expected to be finalized Oct. 13.