Battling Over Payments

Patients Caught In Aetna-AMA Out-Of-Network Fight

Courant Staff Writer

Aetna and the American Medical Association are fighting about payments to doctors again, and patients across the nation are getting caught in between.

The dispute centers on how much Aetna pays out-of-network doctors in some instances and the right of those doctors to bill HMO members for charges the insurer doesn’t pay.

Millions of dollars are at stake, and physicians say Aetna is violating a provision of its 2003 nationwide settlement with doctors, which ended massive litigation over claim payment denials and delays. Aetna says it’s trying to protect members from high charges.

The issue is who pays what when Aetna HMO members end up getting care from physicians who aren’t part of the insurer’s network because there was no opportunity to choose an in-network doctor.

That often happens in emergencies and with hospital-based surgery or other care where patients aren’t in a position to pick in-network anesthesiologists or other doctors to take care of them.

In those instances, Aetna HMOs, as of June 1, 2007, are reimbursing out-of-network providers 125 percent of what Medicare would have paid for the same services. A different formula is required in New Jersey.

The 125 percent of Medicare, however, is less than what many doctors charge, and they often bill patients for the balance that insurance doesn’t pay.

Aetna, however, is telling HMO members who involuntarily got out-of-network care that they’re not liable for the balance billed by the physicians. Aetna sends an “explanation of benefits” showing what it paid the doctor, and a letter telling members that if the doctor bills them for the balance, to send the bill to Aetna.

Aetna says it will try to resolve the situation itself with the out-of-network physician, and may end up making additional payments to some doctors. It isn’t clear how much money consumers will still be on the hook for.

“Our goal is to keep patients out of this,” said Aetna spokeswoman Susan G. Millerick.

But some patients are in the thick of it, confused and refusing to pay the doctors.

“There has been a lot of bad blood between patients and physicians” because of Aetna’s actions, said Dr. Alan Schorr, an endocrinologist in Langhorne, Pa. “It has put us in an adversarial position.”

Schorr, who believes he’s owed nearly $10,000 from the balance-billing fallout, doesn’t contract with HMOs or PPOs, and is the only endocrinologist at the local hospital.

The American Medical Association (AMA) is denouncing Aetna’s policy, which doesn’t apply to PPO, or preferred provider, health plans.

“This policy fails to recognize each physician has different practice costs as reflected by their billed charges,” AMA Chief Executive Dr. Michael D. Maves said in a recent letter to Aetna Chief Medical Officer Dr. Troyen A. Brennan. “It is simply arbitrary and capricious for Aetna to deem 125 percent of Medicare to be a fair payment across the board.”

The two men are scheduled to meet to discuss the issues in early February.

The AMA believes Aetna is breaching the 2003 settlement by failing to state on explanation-of-benefits forms to HMO members that out-of-network doctors have a right to balance-bill them.

“We think that’s a fairly clear violation of the settlement,” said Cameron Staples, compliance dispute facilitator for the Aetna settlement. He says he’s gotten eight or nine complaints from doctors — none from Connecticut — stemming from the balance-billing issue.

“Patients are getting caught in the middle,” added Staples, a lawyer and also a Connecticut state representative.

Aetna says that in instances where HMO members had no choice in getting out-of-network doctors, the company is treating the care as if it were in-network. That’s because in-network doctors aren’t allowed to balance-bill HMO members.

Staples, who has been talking and meeting with Aetna about settlement-related issues, said, “Aetna has been very cooperative in attempting to work out disputes … and I’m hopeful we’ll work these out, too.”

Aetna says its policy of paying 125 percent of Medicare’s rates for out-of-network care that HMO members didn’t choose isn’t new. But before June 1, it wasn’t enforced consistently and Aetna would often pay doctors more if they refused to accept the initial payment and billed the company again.

Aetna sent letters about the crackdown on enforcement of its policy to 433 health care providers in 29 states, including Connecticut — those who filed more than 10 out-of-network claims during the first quarter of 2007.

Before June 2007, Aetna says, it received an average of about 18,000 balance bills a month nationwide from doctors and members. Since then, the average has been 7,600 a month.

Some doctors charge three or four times what Medicare would pay, Aetna says.

“It’s our obligation,” Millerick said, “to develop mechanisms to protect members and employers from these kinds of billing practices when members do not have a meaningful opportunity to select a participating [in-network] provider.”

Aetna has about 4.9 million HMO members nationally and 54,000 in Connecticut.

Matthew C. Katz, executive director of the Connecticut State Medical Society, said Thursday the society agrees with the AMA’s concerns. “Physicians have made an informed decision to be out-of-network,” he said. “We believe that by their actions, Aetna is essentially trying to force them to accept in-network or lower rates.”

New Jersey insurance regulators fined Aetna $9.5 million in July over similar issues of not properly paying for some out-of-network services. Aetna hasn’t paid the fine yet because it’s appealing the order and seeking a hearing, Millerick said.
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