In its health insurance policies, Aetna Health, Inc., allows subscribers to choose health care providers who are members of the Aetna network or pay higher premiums to use out-of-network (ONET) providers. In-network providers have negotiated discount rates with Aetna, which pays them directly. The insurer reimburses ONET providers for a percentage of the lesser of either the actual amount of their bills or a usual, customary, and reasonable rate (UCR) determined by what other providers in the same or a similar geographical area charge. The providers bill patients for any amounts over the amount Aetna reimburses.
Like other large insurers, Aetna calculates the UCR rate using Ingenix, a database created by insurer UnitedHealth Group, Inc. Insurers provide Ingenix with claim rates across the country, and the database gives them a statistical UCR whenever a claim is made. Rather than enter all charges into the database, however, Aetna deleted valid high charges. Ingenix then removed additional high charges. Thus, when it calculated a UCR for an Aetna claim, the amount was artificially low.
Under this system, subscribers were forced to pay higher amounts to the ONET providers. In cases where the subscribers were unable to pay those charges, the providers amassed significant unpaid bills.
Class action lawsuits were filed against Aetna, UnitedHealth, and Ingenix by ONET providers, Aetna subscribers, and several medical associations, including the American Medical Society. The suits were consolidated in MDL. The plaintiffs alleged unpaid benefits, breach of plan provisions, failure to provide accurate plan materials, breach of the fiduciary duties of loyalty and due care, failure to provide full and fair review, and other ERISA violations. They also claimed the defendants violated RICO.
The parties settled for up to $120 million, including $60 million in a general settlement fund from which class members will receive a maximum of $40 for each year that they were subscribers or ONET providers. Another $60 million is available for “prove-up funds” that class members can opt for instead of the general fund. Subscribers who can prove they paid a balance over Aetna reimbursements that was equal to or greater than $200 will receive the lesser of either the balance or 3 to 5 percent of the amount allowed payable for that type of claim. Providers who can prove they received less than full payment for a balance can also make prove-up claims.
Citation: In re: Aetna UCR Litig., No. 2:07-cv-03541, MDL No. 2020 (D.N.J. Dec. 7, 2012).
Plaintiff counsel: AAJ members Edith M. Kallas, Joe R. Whatley Jr., Stephen A. Weiss, and Diogenes P. Kekatos, and D. Brian Hufford, Robert J. Axelrod, David R. Scott, Christopher M. Burke, and Joseph P. Guglielmo, all of New York City; AAJ member Andrew S. Friedman, Phoenix; AAJ member Raymond R. Boucher, Beverly Hills, Calif.; AAJ member H. Tim Hoffman, Oakland, Calif.; James E. Cecchi and Lindsey Taylor, Roseland, N.J.; and Christopher P. Ridout, Long Beach, Calif.