Byline: MICHAEL PRINCE
Despite the widespread attention it has received, Aetna Inc.'s agreement to settle a long-standing lawsuit by doctors over the payment of claims is not expected to significantly alter the health care landscape.
In particular, the changes that Aetna has agreed to make to its business practices likely will have little impact on employers.
Health insurers have already undertaken many of the changes that Aetna has agreed to make, said Joe Martingale, national leader for health care strategy at Watson Wyatt Worldwide in New York. 'There is not that much dramatically new,'' Mr. Martingale said.
'Those are just necessities within the managed care marketplace and are already mainstream,'' added Eric Wurzel, a partner with benefit consultant Travers O'keefe in New York.
In the past few years, health plans have been moving toward more administrative simplicity and transparency. This settlement represents a continuation of that trend, said Susan Pisano, vp of communications for the American Assn. of Health Plans in Washington.
The litigation is one of several suits that were consolidated in 2000 before U.S. District Court Judge Federico Moreno in Miami. The suits, brought by more than 700,000 physicians against nearly every large managed care organization, charge that the companies shortchanged doctors on payments.
Last week, Judge Moreno gave preliminary approval of the settlement. Of the remaining defendants, only CIGNA Corp. has reached a settlement, but Judge Moreno has yet to approve the agreement.
In the settlement, Aetna agreed to pay the physicians $100 million and their attorneys $50 million and to spend $20 million to fund a nonprofit health care foundation.
Perhaps more importantly than the money Aetna will pay are the changes it has agreed to make in the way it conducts business. The changes are designed to reduce administrative hassles for physicians and speed payments to them.
Specifically, Aetna has agreed to:
* Use automated adjudication of claims to speed payment to doctors.
* Enhance the ability of physicians to register referrals, precertify procedures, submit claims and check for plan members' eligibility through an Aetna Web site.
* Establish an independent external review board to resolve billing disputes.
* Change the definition of 'medical necessity'' so that it is in accordance with generally accepted standards of medical practice.
* Stop the practice of automatically reducing some of the billing codes submitted by physicians.
* Utilize an electronic claim adjudication tool.
'It's a sea change in the relationship between physicians and Aetna,'' Dr. John Rowe, Aetna's chairman and chief executive officer, said at a press conference late last month announcing the agreement.
Many of these changes, though, involve provisions that are waning in importance, such as precertification and referrals, said Ralph Kimmich, director of benefits and compensation at Southwest Airlines Co. in Dallas. As a result, Mr. Kimmich said, he does not see the agreement having much impact on the overall health care industry.
Helen Darling, president of the Washington Business Group on Health, said Aetna and other health plans have already made these changes in their business operations in the past few years. In some cases, health insurers have gone further than Aetna intends to, she said. So while Aetna said it will make it easier for doctors to obtain precertification, UnitedHealth Group Inc. has done away with precertification altogether, Ms. Darling said.
The formalized settlement, though, will prevent Aetna from backpedaling on its commitment, she said. 'It keeps their feet to the fire,'' Ms. Darling said.
A spokesman for Minneapolis-based UnitedHealth said the company's business practices regarding physicians will not change because of the Aetna settlement. Most of Aetna's proposed changes 'have long been part of UnitedHealthcare's business practices,'' he said.
The changes that Aetna is making have already taken place at Humana Inc., according to a Humana spokesman.
Some of those changes have been made in response to the demands of employers, employees and doctors who want to eliminate the restrictions of managed care, he said.
The spokesman noted that these provisions are playing a lesser role as employees have been moving from tightly managed health maintenance organizations into less-restrictive preferred provider organizations.
While the changes may not be totally new, they do serve to raise the awareness of how insurers have altered their relationship with doctors, Ms. Pisano said.
Perhaps the biggest change that employers can expect to see will be a reduction in the level of complaints from employees about Aetna's services, Ms. Darling said. When there will be fewer billing problems between doctors and Aetna, there will generally be fewer billing issues with employees and fewer complaints about health plans, she said.
The changes may also reduce the disruption of Aetna's doctor networks, Mr. Wurzel said. Until the past few years, Aetna had a reputation as a tough negotiator with physicians, driving many from the Aetna networks, he said. That reputation has changed in the past couple of years, and this settlement should further reduce network turnover, he said.
Mr. Kimmich noted that if the new definition of 'medical necessity'' is adopted by the entire health care industry, it could expand the number of covered procedures.
By and large, though, the changes Aetna intends to make merely dabble at the fringes and do not touch the core of the health care system.
'This is the beginning of the fine-tuning of the managed care industry,'' Mr. Wurzel said.
CAPTION(S):
Judge Moreno
