March 14 Aetna Inc, the third largest
U.S. health insurer, said on Friday it would not proceed with a
proposed $120 million settlement with healthcare providers and
plan members over out-of-network reimbursements.
Aetna, which had agreed to settle in December 2012, said
enough claimants had opted out to trigger a provision enabling
it to cancel the deal.
"Various legal and factual developments since the date of
the settlement agreement led the company to believe terminating
the settlement agreement was in its best interests," Aetna said
in a filing with the U.S. Securities and Exchange Commission.
Aetna had set aside reserves for the settlement and said it
would add the remainder of those reserves to earnings, excluding
amounts due to the settlement administrator. It took a $78
million after-tax charge for the settlement in the fourth
quarter of 2012. Aetna said it will resume its defense in court.
Patients and doctors accused the Hartford, Connecticut based
insurer of using databases provided by Ingenix, part of
UnitedHealth Group Inc since renamed OptumInsight, to
systematically underpay claims involving services and supplies
from out-of-network providers.
In 2008, then-New York attorney general, Andrew Cuomo, who
is now the state's governor, opened a separate probe into
insurer reimbursements that ended in settlements with many
On Jan. 13, 2009, UnitedHealth and Aetna agreed to stop
using the Ingenix database and to help fund a new independent
database Fair Health to calculate rates. Days later,
UnitedHealth agreed to pay $350 million to settle lawsuits over
its out-of-network reimbursements.
Aetna did not disclose how many claimants had opted out of
the settlement it was now vacating but said they had exceeded a
threshold that allowed Aetna to end the agreement.
The threshold was $20 million in value represented by the
difference between charges providers billed for out-of-network
services and the insurer's allowed amount that it agreed to pay
on those services, the company said.
The Aetna settlement would have paid claims on reimbursement
practices starting March 1, 2001 for health plan members and
June 3, 2003 for providers. The agreement did not contain an
admission of wrongdoing.
The case is In re: Aetna UCR Litigation, U.S. District
Court, District of New Jersey, Nos. MDL-2020 and 07-03541.