Must Read Article out of Wall Street Journal

Author Subject: Must Read Article out of Wall Street Journal
Tarzan Posted At 18:37:54 01/30/2001
Aetna Weighs a Managed-Care Overhaul

Move may be made to end fraud suit and improve ties to doctors, patients.

Wall Street Journal

Aetna Inc. is considering a sweeping list of changes in the way it provides managed care nationwide as part of talks to settle a huge fraud and racketeering suit brought against it by lawyers targeting the HMO industry.
The settlement talks, quietly under way in New York, have reached “an advanced stage,” according to one lawyer familiar with them. And any agreement, under terms being discussed, could bring about a fundamental change in how the nations’ largest health insured deals with doctors and patients under managed care. The two sides this week expect to discuss how much Aetna may pay in damages to plan members.
While the talks could still fall apart, they come as Aetna’s new chief executive, John W. Rowe, is trying to overhaul the company's image as the embodiment of much that is wrong with managed care by improving ties frayed relations with doctors and patients. Last month, for example, the company said it would abandon its “all products rule,“ under which doctors were forced to participate in Aetna’s lower-paying health-maintences organization network if they wanted to participate in its higher-paying PPO, or preferred provider organization, network, which offers more freedom in choice of doctors. (this is when your doctor first hangs you out to dry, making you fair game for IME, CME, LIE.)
Making Nice
Plaintiff’s hope to get Aetna to agree to limit its use of :
Precertification: Doctors calling in to ask for permission for most treatments.
“Cookbook” Medicine: The use of strict medical guidelines in determining care. (one doctor, one operation)
Financial Incentives: Basing some doctors fees on utilization.

According to settlement terms under discussion, Aetna would agree to end the use of financial incentives that Plaintiffs contend reward physicians who restrict plan members’; access to health care. The Hartford, Conn. company would agree to limit the industry practice of capitated fees, the per patient pay arrangement that it has with providers, under which fee schedules can be adjusted to punish physicians with high utilization or referral rates. In other words, one surgery, and you are done, as good as you will get.
So-Called Cookbooks
Aetna would also drop the use of medical guidelines, so-called cookbooks, created by actuarial firms and used by some insures to deny full reimbursement for care, according to terms under discussion. The company would also make full disclosure to plan members of the limits of its covered services.(IME, CME, LIE.) (Cripple you and give no options for treatment, like no other options exist.)
In addition, Aetna would disclose all financial arrangements with pharmaceutical companies for price reductions it receives. And the company would place strict limits on the practice, criticized by physicians, of reducing requests for payment by a method known as “down-coding.”
Aetna and plaintiffs’ lawyers have yet to reach a final agreement, but the broad outlines of a deal were drafted by plaintiffs’ lawyers and presented last week. A spokesman for the company declined to comment on the talks yesterday. But a person familiar with Aetna’s thinking on the matter said the company views the discussion thus far as “preliminary.”
Aetna initiated the current round of talks in October, after a federal judicial panel in New York raised the stakes for all participants in the litigation by ordering some two dozen suits seeking class-action certification against HMO’s consolidated before a federal judge in Miami.
More Than a Dozen Suits
The suits began building in 1999, as well-heeled class-action lawyers with experience in asbestos and tobacco litigation turned their attention to the nations biggest health insures.( Please Come to Oregon) (The cases include more that a dozen suits on behalf of health-plan subscribers alleging that HMO’s have engaged in fraud and even “racketeering” by using undisclosed financial incentives and controls to limit the medical care patients receive.
So fare, only Aetna is involved in the settlement talks. Other companies named in federal suits pending in Miami include Humana Inc.: Prudential Insurance Co. of America, which was acquired by Aetna in 1999; Cigna Corp.: United Health Group Inc.”” PacifiCare Health Systems Inc.’ and Health Net Inc. Formerly Foundation Health Systems. (What no Liberty NW or SAIF)
Aetna is considering a Major Overhaul for Managed Care
The talks come as a surprise, because none of the suits has yet been certified to proceed as a class action. Indeed, U.S. District Judge Federico Moreno in Miami is currently weighing industry motions to dismiss the claims altogether. A decision is expected later this month.
But talks have accelerated as both sides await his decision-and in anticipation of a renewed push for health-care overhaul in Congress, after President elect George W. Bush takes office this week. “things have escalated, because it’s clear that the Bush administration is not dropping this issue,” said one plaintiff’s lawyer close to the talks. (Surprise even Dub-ya is listening??????)
That Aetna is even considering a settlement at this juncture signifies a sharp though not entirely unexpected, turnabout. In February, its board forced a hard-nosed chief executive, Richard Huber, to resign and in September named Dr. Rowe, a physician and the head of New York hospital system, as its new chief executive. Since then, Dr. Rowe has been touring the country, speaking to both physicians and employers about ways to stop antagonizing doctors and patients.
Aetna’s new mission contrasts sharply with its former image as a hard-ball negotiator with doctors and one of the least helpful HMOs to patients facing a medical crisis. (It’s standard practice, they all do it.) This aggressive tack, meant to hold down medical costs, backfired as other health insures marketed less-stringent products that have become popular with consumers and employers, including preferred-provider networks and point of service plans. While these plans made it easy for patients to get care outside of an HMO network. Aetna focused on promoting its strict HMOs.
Last year, it saw earnings shortfalls, driven in part by higher than expected medical cost increases. today, Aetna’s profit margins are among the lowest in the industry. Wall Street analysis warn that efforts to improve relations with doctors and patients could come as a financial cost.
Look out Liberty NW, your next.
Nancy Re: Must Read Article out of Wall Street Journal (Currently 0 replies)
Posted At 08:05:18 01/31/2001

Dear Tarzan,
Do you have the date of the Wall St. article? Please post.

Tarzan Re: Must Read Article out of Wall Street Journal (Currently 0 replies)
Posted At 14:17:12 01/31/2001

1-17-2001 Page 3 Wall Street Journal

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