Physicians fight Aetna over caps on out-of-network pay

Physicians in multiple states are crying foul at Aetna's declaration that it would cap the amount of reimbursement paid to out-of-network doctors at 125% of Medicare. They are also upset that Aetna informed patients through their explanation of benefits forms that they don't have to pay any bill a doctor might send to make up for costs and fees lost as a result of the insurer's cap.

Organized medicine is telling Aetna its move isn't just unfair -- it's also a violation of its settlement agreement with physicians as part of a class-action lawsuit that claimed health plans conspired to underpay physicians by downcoding and bundling physician claims. The settlement agreement says Aetna may not "disparage" nonparticipating physicians and that each EOB "shall indicate the amount for which the Physician may bill the Member and state 'Physician may bill you' such amount."

"The AMA cannot overemphasize its opposition to Aetna's policy of failing to adequately reimburse nonparticipating physicians, and strongly encourages Aetna to withdraw its policy of creating a ceiling tied to the Medicare fee schedule," American Medical Association Executive Vice President Michael D. Maves, MD, MBA, wrote in a Dec. 18, 2007, letter to Aetna. "Physicians must be immediately and correctly reimbursed for their billed charges."

In a few states, such as Pennsylvania, physicians recently have been upset over Aetna's declaration, in a letter to doctors, that the 125% is the "maximum state mandated rate." The Pennsylvania Medical Society said its state has no such rate.

The society filed a complaint with Pennsylvania's insurance department over Aetna's out-of-network policies, though the department, citing policy on not speaking regarding pending complaints, would not comment.

"We do not believe Aetna has the right to determine what a nonpar [physician] should be able to receive," Dennis Olmstead, chief economist of the Pennsylvania Medical Society, wrote in an e-mail to AMNews.

Olmstead wrote that the society filed the complaint "due to the action the New Jersey [Dept.] of Banking and Insurance took against Aetna for similar activity in New Jersey." The department levied a $9.75 million fine against Aetna and ordered reprocessing of claims from out-of-network physicians for full payment, plus 12% interest.

Aetna spokesman Walter Cherniak Jr. said the 125% cap has been its policy for some time. However, he said the form letter that the company's Lexington, Ky., office sent to Pennsylvania physicians about 125% being a maximum state-mandated rate was sent incorrectly.

"We have corrected the mistake," he said, adding that there are some states that have a mandated maximum, but Pennsylvania is not one of them.

Cherniak also said Aetna does not believe it has violated its settlement agreement. He said the company recognizes that the agreement requires it to tell "members in our traditional plans that they could be balance billed. We do that."

Cherniak said the confusion is over EOBs that were sent to HMO members who were at an in-network facility but received care from out-of-network physicians. The EOBs were recently redrafted to advise patients to send their bills to Aetna, not to ignore them completely, he said.

But the attorney handling settlement dispute resolutions disagrees with Aetna's contention that it is not in violation.

Cameron Staples, who also is a Connecticut state legislator and legal counsel to the Connecticut State Medical Society, said he has nine pending complaints about Aetna "where the EOB says the patient has no responsibility. And that's a clear violation of the settlement."

In addition to Pennsylvania, complaints have been received from Texas, Alaska, Florida and New Jersey, Staples said.

Staples said he is waiting to hear back from Aetna on all of the complaints, some of which were filed as long as two years ago. The goal, he said, is to resolve the situation directly with Aetna.

But if an agreement cannot be made, the case will go to arbitration. What the arbitrator says is generally the final word, unless the insurer wants to appeal in court, he said.