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Aetna to Pay as Much as $120 Million to Settle Rate Suits

Aetna Inc., (AET) the third-largest U.S. health insurer, agreed to pay as much as $120 million to settle lawsuits over its reimbursement for treatment by out-of-network doctors.

The company will pay $60 million to a general settlement fund and as much as $60 million more depending on how many settlement class members submit valid claims. The agreement covers out-of-network providers and provider groups from June 3, 2003, and plan members from March 1, 2001, according to court papers filed today in federal court in Newark, New Jersey.

Subscribers and providers sued Aetna beginning in 2007 alleging that it improperly used a third-party database, Ingenix, to underpay claims for services provided to plan members by out-of-network providers.

Aetna, based in Hartford, Connecticut, paid $20 million in 2009 to resolve an investigation of reimbursement rates by the New York attorney general at the time, Andrew Cuomo. Ingenix, which insurers used to help determine customary costs for claims, was shut down by its parent UnitedHealth Group Inc. as a result of the probe.

The settlement announced today is subject to court approval.

The case is In re Aetna UCR Litigation, 07-cv-03541, U.S. District Court, District of New Jersey (Newark).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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