Medical societies suing the major health plans hope their newly won settlement with Aetna will be the basis for a dramatic change in the way managed care deals with coverage decisions and physician payments.
The settlement, unveiled May 22, will "raise the bar for the entire health insurance industry on fair and open business practices," says Donald Palmisano, M.D., president-elect of the AMA.
The association is not a party to the lawsuits, but its Current Procedural Terminology codes will play a role in the settlement.
A key feature of the 82-page settlement is a set of agreements on disclosing payment rules, determining coverage, processing claims and handling physicians' appeals of Aetna's decisions, according to lawyers who negotiated it.
They say Aetna has basically agreed to AMA-CPT guidelines for processing claims and to a definition of "medical necessity" for coverage decisions that closely mirrors the AMA definition.
Aetna also would distribute $100 million in cash to some 600,000 physicians in the medical societies' class action lawsuits, but society officials say Aetna's promised changes will be more valuable, saving physicians $300 million a year in work spent on billing and coverage.
The officials, representing 17 state societies suing Aetna in federal court in Miami, say they hope 10 other defendant plans in Miami will agree to the same changes, rather than to less generous settlements like one proposed last year between Cigna HealthCare and an Illinois physician. The Cigna settlement, which the medical societies vehemently opposed because it did little to change payment practices, briefly won class action status in an Illinois court but had it stripped away in February by a federal panel.
To demonstrate that they really do want to change the industry, the medical societies recently filed new lawsuits against several Blue Cross and Blue Shield plans, most of which had not been named in the original Miami lawsuits.
Aetna Chairman and CEO John Rowe, M.D., says he is glad the company is addressing physicians' objections to the payment process. "No other part of the interaction (between Aetna and doctors) has been as contentious and combustible," Rowe says.
What's next in the Aetna settlement
- Federal court in Miami decides on preliminary approval.
- Notices sent to all physicians in the class action lawsuit; these individuals will have a change to opt out of the agreement.
- Physicians can comment on the proposal in a "fairness hearing" at the Miami court.
- Settlement could win final approval by late fall.