Aetna settlement foundation hands out grants

The foundation established as part of physicians' settlement of a class action against insurance giant Aetna Inc. has awarded about $16 million to physician groups in its inaugural grant cycle.

The grants, which are designed to benefit small and solo practices, were awarded to proposals for programs that sought to help patients with chronic illnesses, upgrade technology to improve patient safety, and treat uninsured patients.

More than 400 organizations submitted proposals, and 26 received grants that ranged from nearly $100,000 to $1 million. Foundation leaders said it was yet another positive outcome of the years doctors spent fighting insurance companies over reimbursement.

"Put it this way: We're very proud to be able to do this and we expect in the next year, we'll be able to do it again," said Tim Norbeck, executive director of the Connecticut State Medical Society and president of the Physicians' Foundation for Health Systems Excellence.

The foundation, which has nearly $100 million in assets, was set up as part of physicians' agreement with Aetna. The insurer gave the foundation $20 million as part of the settlement. The remainder was from physicians who donated their individual portions of the settlement.

Aetna was the first company to settle physician claims that HMOs conspired to systematically underpay doctors by downcoding and bundling claims. Of the 10 original defendants, six additional companies have settled: Cigna Healthcare, Health Net, Humana Inc., Prudential Insurance Co. of America, WellPoint (including claims against WellPoint Health Networks) and Anthem.

Only Coventry, PacifiCare Health System and UnitedHealthcare -- the latter two of which have announced plans to merge -- have not settled. A trial is set to begin Jan. 23, 2006.

Many of the foundation grants were awarded to larger nonprofit organizations that proposed to conduct research on an issue that could benefit the greater physician community, said Lou Goodman, PhD, CEO of the Texas Medical Assn. and chair of the foundation's Grants Committee.

"We wanted research to benefit small and solo groups, and we wanted results that would be transportable," he said. "We want to put all the results on a Web site and widely disseminate it."

A second foundation, Physicians' Foundation for Health Systems Innovations, was created from doctors' settlement with Cigna. It has about $16 million in assets, and plans to award a sizeable grant to a cornerstone program that can help physicians adapt to the ever-changing information technology arena, Dr. Goodman said. Members of that foundation plan to wait for more clarity from the federal government regarding health care information technology issues to decide what the proper program should be, he said.

Information about the foundations and grant cycles is online (link).