Aetna's olive branch is an encouraging sign

The insurer promises to be more open in communicating with physicians over pay and coverage issues -- an idea the entire industry should follow.

Editorial. July 7, 2003.

Aetna's proposed settlement of a lawsuit regarding its business practices is an encouraging first step for improving the contentious relationship physicians have not only with that company but also with all of managed care.

That is, if Aetna carries through on its promise to be more forthright in its dealings with doctors. The make-love-not-war deal comes after years of Aetna being considered, by many physicians, to be among the worst managed care companies in terms of its treatment of doctors.

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Earlier about Aetna

Under previous leadership, Aetna was notorious among physicians for being slow to pay but quick to cut reimbursement rates. It was an innovator and aggressive practitioner of so-called "all-products clauses." By forcing physicians to sign up for all of Aetna's offerings -- for example, HMO as well as PPO -- doctors effectively became unwilling participants in steering patients into more restrictive managed care plans. Aetna's strategies were all the more effective -- and resented -- by the sheer marketplace clout that the giant plan possessed.

Origins of this new settlement can be traced to the late 2000 appointment of John Rowe, MD, as Aetna's chair and chief executive officer. He said at the time that improving physician relations was a key to improving profitability. While until now progress has been underwhelming, the settlement agreement could represent a substantial change.

Aetna promises to be clearer to patients and physicians on what it will cover, to speed up payments to physicians and to reduce administrative hassles. There will be an independent appeals process for physician billing disputes and a clear definition of "medical necessity" based on "generally accepted standards of medical practice." Aetna also plans to post on its Web site what it will pay physicians for certain procedures. It's stunning that so many managed care companies still won't share that basic information with physicians.

In putting forth the settlement, Aetna hopes to close the books on litigation brought by organized medicine and individual physicians. It is now up to U.S. District Court Judge Federico Moreno to give final approval at a hearing slated for Oct. 14. (Physicians have until Aug. 29 to opt out of the settlement, which would enable them to keep their right to sue Aetna over its practices.)

If approved, organized medicine and the entire medical community will be watching carefully to see that Aetna keeps true to its word. Arguably it has been the community's pressure thus far that has played a major role in making the settlement a reality.

Yet for all of the white-hat language of the Aetna deal, physicians should also be mindful about what's outside the scope of the settlement.

Aetna isn't promising to increase reimbursements for physicians. For all we know, Aetna might cut pay. And Aetna hasn't given up using code-editing software, although at least it promises to tell physicians which codes are edited.

There won't be much in the way of settling past grievances. In terms of cash, Aetna is offering an average of $142 per physician in the settlement.

But for now, Aetna is being given the benefit of the doubt. The generally positive reception the settlement is getting should prompt other health plans -- which for now are on the record as shunning the new Aetna strategy -- to rethink their relationships with the medical community.