May 29, 2000 -- The agreement reached last month in the lawsuit brought by
the State of Texas against Aetna U.S. Healthcare may have solved the company's
problems there, but two other key states, New York and Connecticut, are moving
forward with probes aimed at reviewing the insurance giant's practices.
Attorneys general in both states signaled that they will continue their
high-profile investigations of Aetna even as the company began taking steps to
institute the provisions of its Texas pact nationwide.
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Sued by Texas in 1998 for allegedly using financial pressure to force
doctors to cut back on necessary medical care, the company signed a no-fault
settlement agreeing to voluntarily change many of its policies there.
Sea Changes in Connecticut
Aetna had hoped it could use the Texas settlement as a model for plans in
other states where the policies and protocols of its widely used Health
Maintenance Organization (HMO) are under investigative review. But in mid-May,
after the company offered to make some changes in its procedures in
Connecticut, Richard Blumenthal, the attorney general in that state, would say
only that the firm's offer was a "good start." Blumenthal said his
office's probe into Aetna's work in Connecticut would continue, and that he
wanted the firm to consider changing its practice of paying a set fee for each
patient ("capitation"), which, he said, "wrongly shifts the risk of
health care to physicians and their patients."
William Donaldson, Aetna chairman and CEO, told a meeting of the Connecticut
State Medical Society that his firm hoped its proposals would be given a fair
assessment by the state's government and physicians. "My fervent hope is
that we can form a more respectful and collaborative partnership that makes the
system work better for everyone," he said. And Tim Norbeck, the medical
society's executive director, responded that Donaldson's statement was "an
indication that Aetna is sincere about wanting to reach out and partner with
What About New York?
In New York, State Attorney General Eliot L. Spitzer has been noticeably
silent on the issue since Texas and Aetna settled. In New York, Aetna is
considered the worst of the managed care companies when it comes to paying
claims and dealing with providers. In four rounds of fines on the industry over
the past 12 months, the New York Insurance Department has hit Aetna with more
penalties than any other firm for not paying claims promptly. Officials in
Spitzer's office, which has been examining Aetna's procedures for approving or
denying claims and the late payment of claims, will say only that the pact does
not fully address Spitzer's concerns.
In New Jersey, a doctor filed a class action lawsuit against Aetna in
October, alleging that the HMO took advantage of its position by failing to pay
doctors on time and, in some cases, failing to pay at all. Similar suits have
been filed in Philadelphia and California.
Michael D. Towle is based in Chantilly, Va., and writes regularly on health
and legal issues for WebMD.