Physicians score victory in class-action compliance settlement

Aetna and medical societies involved in the original case against HMOs have resolved a dispute related to the insurer's denial of specific claims.

By Mike Norbut — Posted June 5, 2006

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Physicians involved in class-action settlements with the health insurance industry have used them successfully to resolve a dispute involving Aetna's denial of a specific coding modifier.

In an agreement worth at least $6.3 million to doctors, Aetna agreed to pay previously rejected physician claims for reimbursement when the CPT modifier 25 was added to an evaluation and management service.

Any physician who did not opt out of the original class-action case and had this type of claim denied dating back, in some cases, to the effective date of the settlement -- May 21, 2003 -- should see money from this agreement, officials said.

The company also has agreed to fix its claims-payment system to pay these codes correctly going forward.

"Since the cases were settled, the medical societies have worked together to enforce compliance," said Carol Scheele, associate general counsel for the North Carolina Medical Society, one of the physician organizations involved in the dispute resolution. "Part of the [original settlement] agreement is that they pay modifiers. Not paying these code combinations is a major, major violation of this agreement."

As health plans started to settle class-action cases against them over the last few years, there was concern among physicians that getting insurers to comply with the terms of the agreements would be a difficult task.

There already have been several claim disputes between physicians and insurance companies, and more are expected as other settlements are made official.

This compliance agreement, however, proves the class-action settlements have teeth, said attorneys representing medical societies.

"This is not binding on any future plan or future compliance dispute officer, but it certainly provides some basis for future discussion and offers a pattern to follow," said New Haven, Conn., attorney Cam Staples, outside counsel for the Connecticut State Medical Society. "This validates that systemic relief is available for all affected class members when it's adequately proven that a health plan has not implemented the required changes."

In a statement, Aetna spokeswoman Cynthia Michener said the insurer was "pleased to reach a resolution on this matter with the medical societies, and [we] hope that health professionals will see this as further evidence of Aetna's commitment to a collaborative relationship with the medical community."

Physicians disputed both Aetna's denial of claims with the appended modifier 25, as well as its lack of information on its corporate Web site regarding what services the insurer would and would not cover. Both were requirements of the class-action settlement, medical society attorneys said.

CPT Assistant, published by the AMA, describes the modifier 25 as a "significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service." Despite performing separate services, however, physicians alleged Aetna was not paying them for both.

As part of the agreement, a "Strike Force" will be created to review Aetna payment policies and codes for which the insurer has established policies not to pay. According to the mediation order, Aetna will make changes based on Strike Force recommendations that would increase annual physician reimbursement by $1.7 million, based on historical patterns.

Coding changes, including the applicable modifier 25 combinations that will be reprocessed, will be available on Aetna's secure provider Web site (link).

The agreement calls for Aetna to reprocess denied modifier 25 claims for all physicians dating to July 1, 2004. Michener said until Aetna fully implements changes to its claims processing system, doctors might still see denial notices automatically generated by the system. Physicians do not need to resubmit any claims, as Aetna will manually reprocess the claims in question, she said.

Class-action claims representing more than 700,000 physicians originally were filed alleging HMOs conspired to systematically underpay doctors by downcoding and bundling claims. Of the 10 original insurer defendants, seven have settled: Aetna, Cigna Healthcare, Health Net, Humana Inc. Prudential Insurance Co. of America, and WellPoint (including claims against WellPoint Health Networks and Anthem). Only Coventry, PacifiCare Health System and UnitedHealth Group have not settled.

Information about the prior settlements, as well as compliance dispute forms and instructions, are available online (link).

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