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Wednesday, February 04, 2009

Aetna Settles

As reported by the Hartford Courant:



Aetna will reimburse more than $5.1 million on 73,000 health claims for college students it underpaid between 1998 and April 1, 2008, under a nationwide agreement announced Monday by New York Attorney General Andrew M. Cuomo.

The claims involved out-of-network care in which Aetna Student Health — formerly called Chickering Student Health — paid physicians what it considered reasonable and customary. Doctors whose charges were higher could bill students for the balance.

Aetna will reimburse students if they paid such a balance. If a student wasn't balance-billed, Aetna will reimburse the doctor. The company says its under-payments averaged $25 each nationwide.

The inadequate claim payments stem from outdated information that Aetna and other insurers used from the databases of Ingenix, a UnitedHealth Group unit.

The $5.1 million agreement is in addition to the $20 million Aetna agreed to pay in a settlement last month of Cuomo's investigation of the out-of-network payment system.


We had posted earlier here about a settlement UnitedHealth made related to its use of the database run by its Ingenix subsidiary.

Note first that Aetna and UnitedHealth are supposed to be fierce competitors. Yet they used the same database, a database constructed by a UnitedHealth subsidiary. This is a reminder that although many have promised that a competitive, market-based health care system would decrease costs, improve access and improve quality, the system that was supposed to be competitive mostly was not. In this example, multiple, supposedly competing managed care organizations/ health insurance companies all appeared to use one company's database. (We have also noted how nearly all managed care organizations/ health insurance companies all basically use a payment schedule for physicians provided by the US government.) Various such anti-competitive practices by managed care organizations / health care insurance companies have to date mostly elicited yawns from health care and policy researchers, the press, government regulators, and the legislature.

Second, note that Aetna's use of the UnitedHealth Ingenix database allowed it to underpay physicians, sometimes resulting in excess out of pocket expenses for students. That does not seem to square with Aetna's high-minded mission statement:

Aetna is dedicated to helping people achieve health and financial security by providing easy access to safe, cost-effective, high-quality health care and protecting their finances against health-related risks.

Aetna surely was not protecting these students' "finances from health-related risks."

This is, of course, just one of many examples we have discussed of cynical marketing techniques by health care corporations. Every big health care organization seems to boast about how it enhances high-quality, accessible, reasonably priced care. But few really seem to do so.

Paul Trossel defined organizational integrity as "how top management of an organisation lives by its own standards." Here again is an example of a failure of organizational integrity in health care, and its (in this case) financial adverse effects on patients.

For a company the size of Aetna, a $25 million settlement is practically petty cash. And like many previous settlements we have discussed, it enacts no penalties on the leaders who actually made the decisions in question. Thus it is unlikely that further settlements like this will promote better organizational integrity, more competition in the health care "market," lower costs, better access, or better quality.

2 comments:

  1. Hi Roy,

    Here's a post I wrote on a related topic:

    http://www.gooznews.com/archives/001318.html

    ReplyDelete
  2. First off I want to say that Im really upset that this blog was posted on my birthday and I didnt get to see it on my birthday! :)
    I most definitely agree with a lot of people in here, throwing differnet views, different discussions. THIS IS WHAT I LIVE FOR!
    :o)

    ReplyDelete