Transcript Document

THE AETNA & CIGNA
SETTLEMENTS
_________________________________
WHAT THEY MEAN TO YOU AND
YOUR PRACTICE
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The Problem
• Improper and illegal reimbursement practices used
by the managed care industry to delay or deny
payment for:
• Bundling
• Downcoding
• Recoding
• Failure to recognize modifiers
• Lack of disclosure
• Breach of prompt pay laws
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The MultiDistrict Litigation
• MSSNY brought class action lawsuits against Aetna, Cigna, United
Healthcare, Oxford, Empire Blue Cross Blue Shield and Excellus.
• Numerous State Medical Societies brought lawsuits based on state law
theories .
• Meanwhile, several other State and County Medical Societies brought
class action lawsuits against large for-profit managed care companies
including but not limited to Aetna, Cigna and United Healthcare based
on the Federal Anti-Racketeering statue (“RICO”).
• MSSNY’s Lawsuits against Aetna, Cigna and United Healthcare were
removed to federal court.
• As a result, MSSNY’s lawsuits were consolidated with the RICO
lawsuits in U.S. District Court in Miami Florida.
• Pending before Judge Frederico Moreno.
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The MultiDistrict Litigation
(cont.)
• MSSNY’s lawsuits are for the most part based on
New York State General Business Laws and
Public Health Laws.
• The “RICO” State Societies based their lawsuits
on the Racketeer Influenced and Corrupt
Organization Act.
– Civil – Not criminal – RICO.
– Theory – Health plans engaged in fraud and extortion in
a common scheme to wrongfully deny payment to
physicians.
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Certification of Class a Key Victory
• September 26, 2002, Judge Moreno certified the
“Provider Track” of the multidistrict litigation as a
national class action and ordered discovery to
commence on September 30, 2002.
• "Here, the Provider Plaintiffs have done more than
just allege a common scheme, they have demonstrated
facts which support its existence." Slip Opinion at 32.
• Defendants appealed the decision.
• The United States Court of Appeals for the 11th
Circuit upheld Judge Moreno’s decision certifying the
class action. On January 10, 2005 the U.S. Supreme
Court refused to hear the defendant’s appeal
challenging the class action certification. This was a
major victory.
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Negotiations With Aetna &
CIGNA
• All of the plaintiffs, MSSNY and the other State
Medical Societies that sued on state law theories
and the RICO plaintiffs were included in the
negotiations of the Aetna and Cigna settlements.
• State Medical Society attorneys and physicians
guided our outside counsel in their negotiations
with Aetna and CIGNA and participated in
drafting settlement language.
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Overview of Settlements
• Aetna Agreement dated May 21, 2003 –
Final approval by Judge Moreno, October
24, 2003.
• CIGNA Agreement dated September 2,
2003 – Final approval by Judge Moreno on
April 22, 2004.
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Coverage
The settlements include a class of all
physicians (over 950,000 physicians,
physician groups and physician organizations)
who have submitted claims to any of the
defendants named in the Complaint
(including, Aetna, Anthem, CIGNA,
Coventry, HealthNet, PacifiCare, Prudential, United,
and Wellpoint).
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Coverage (cont.)
• In addition to the Medical Society of the State of
New York the settlements also include the
following 18 Signatory Medical Societies:
Alaska, California, Connecticut, Denton County
(TX), El Paso County (CO), Florida, Georgia,
Hawaii, Louisiana, Nebraska, New Hampshire,
New Jersey, North Carolina, Northern Virginia,
South Carolina, Tennessee, Texas and
Washington.
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Judge Moreno’s Final
Approval Order (Aetna)
The benefits available
directly to the class
represent an excellent
result….”
“…
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Judge Moreno’s Final Order
(cont.)
• “The Settlement requires changes and
commitments in Aetna’s business practices to
eliminate the worst of the improper practices
involved in managed care….”
• “The settlement creates a substantial fund $100,000,000 - for physicians to recover some of
their damages.”
• “The Settlement establishes a foundation
dedicated to promoting high-quality
healthcare….”
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Effect of Appeals
• Judge Moreno’s decision approving the
settlement has been appealed.
• Aetna will implement injunctive
(prospective) relief.
• Retrospective relief (monetary payments
and funding of the foundation) delayed
pending outcome of appeals.
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Settlements Accomplished
Goals of Lawsuit
• Transparency
• Fairness
• Coding Problems Fixed
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Components of the Settlements
• Retrospective Relief
• Prospective Relief
• Enforcement
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Aetna Retrospective Relief
• $100,000,000 to class members, without any
requirement
for
the
submission
of
documentation.
• $20,000,000 to a foundation controlled by the
Signatory Medical Societies to the Agreement
to create initiatives to improve the quality of
healthcare in the country, the Physicians’
Foundation for Health Systems Excellence,
Inc.
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CIGNA Retrospective Relief
• $30,000,000 to class members who choose not to
submit documentation (Category A).
• No ceiling on amount for physicians documenting
past CIGNA claims (Categories I and II). Minimum
of $40,000,000.
• Minimum of $15,000,000 to a nonprofit foundation
controlled by physicians, the Physicians’ Foundation
for Health Systems Innovations, Inc.
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• Aetna Prospective Relief in
Excess of $300 Million
• CIGNA Prospective Relief in
Excess of $400 Million
• Some Valuations in Excess of
$1 Billion
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No Automatic Downcoding
Evaluation and management codes
will not be automatically downcoded.
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Fairer Payment Rules
CPT coding edits must comply
with key guidelines contained in
the AMA CPT Manual.
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Sample CPT Coding Changes
• Modifier 25 separately identified and paid.
• Modifier 59 separately identified and paid.
• Supervision and interpretation codes
separately identified and paid.
• Add-on codes eligible for separate
treatment.
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Disclosure of Fee Schedules
• Aetna’s physician fee schedules will be
available on the Internet by
December 31, 2004.
• CIGNA will make its fee schedules
available to physicians via e-mail.
• Fee schedules may be changed only
once a year.
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Disclosure of Payment Rules - Aetna
• Payment rules will be consistent across all
company products by December 31, 2004.
• A Web-based pre-adjudication tool will be
available on the Aetna Website so that
physicians can determine what they will be
paid in advance.
• Reimbursement edits and claims
adjudication logic will be disclosed.
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Disclosure of Payment Rules - CIGNA
• A Web-based pre-adjudication tool will be
implemented when commercially available.
• In the interim, pre-adjudication information
available by e-mail.
• Reimbursement edits and claims
adjudication logic will be disclosed.
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Better Medical Necessity Definition
• Patients will be entitled to receive medically
necessary care as determined by a physician
exercising clinically prudent judgment in
accordance with generally accepted standards of
medical practice.
• Cheaper alternatives are permissible only when
they are “at least as likely to produce equivalent
therapeutic or diagnostic results.”
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Payment of Vaccines
and Vaccine Administration
Recommended vaccines and
injectibles and the administration of
such vaccines and injectibles will be
reimbursed.
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Capitation From
Date of Enrollment
Capitation fees will be paid when
the patient chooses a PCP or is
assigned to a PCP, retroactive to
date of enrollment.
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Participation in Pharmacy Risk
Pools Optional
Contracting policies will not
require the use of pharmacy risk
pools.
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Stop-Loss Insurance May Be
Purchased Elsewhere
Physicians will not be restricted
from purchasing stop-loss
coverage from other insurers.
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Faster Credentialing
New physician group members
will be credentialed within 90 days
of application, and physicians can
submit applications prior to their
employment.
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Arbitration Fees Capped
Arbitration fees for solo and small
group physicians will be capped at
$ 1000.
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Gag Clauses Prohibited
“Gag” clauses will be prohibited.
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Non-Participating
Physicians Protected
• Disparaging language will be removed
from EOBs.
• Rights of non-participating physicians to
balance bill patients are protected.
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No HIPAA Mandate
• Physicians will not be forced to use
electronic transactions or otherwise
become HIPAA compliant.
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Physicians’ Input
• Physicians' Advisory Committees will be
created to address issues of nationwide
scope.
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Enforcement of Aetna/CIGNA
Settlements
• Greatest value of these settlements is
injunctive relief.
• We can only hold them to their promises
with your help.
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Settlements Establish 3 Dispute
Resolution Mechanisms
• Billing Disputes
• Medical Necessity Disputes
• Compliance Disputes
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Billing Disputes – Independent Billing
Dispute External Review Board
• Records submission requirements
• Application of coding and payment
rules and methodologies to patient
specific factual situations
• Retained claims – claims in the
pipeline on November 6 for services
provided prior to that date
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Billing Dispute Resolution Process
•
•
Must exhaust internal appeals process – or
wait 45 days after submitting all
documentation necessary to decide appeal.
Must file no more than 90 days after
exhaustion.
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Billing Dispute Resolution Process
(cont.)
•
Must have at least $500 in dispute
– Can aggregate claims that are “substantially
similar”
– Can aggregate claims for 1 year following
submission of original dispute.
• Must pay filing fee –
– $50 minimum + 5% of amount in dispute over
$1,000
– Cap of 50% of cost of review.
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Billing Dispute Resolution Process (cont.)
•
•
•
Decision in 30 days of date all
documentation received (generally no later
than 60 days from original submission of
claims satisfying the $500 threshold).
Payment within 15 days of date Aetna
receives adverse decision.
PROCESS IS OPTIONAL, but if used,
DECISION IS BINDING.
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BURDENSOME RECORDS REQUESTS
• Expedited review available if
demonstrate by a preponderance of the
evidence that the requirement has a
significant adverse economic effect
which justifies expedited review –
otherwise, must exhaust internal appeal.
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WHY MIGHT THIS PROCESS BE
BETTER THAN ARBITRATION ?
• Cases are decided by certified coders and as
necessary, professionals in the clinical specialty or
area at issue.
• Will apply settlement terms, contract terms and
“generally accepted medical billing standards” where
these are silent.
• Settlement terms incorporate better state law where it
exists.
• Expedited time frame for decisions – generally no
more than 60 days.
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GLOBAL IMPACT OF EXTERNAL
BILLING DISPUTE RESOLUTION SYSTEM
• Aetna will publish a summary of the
results of these proceedings annually.
• Aetna will refer issues it loses at least
50% of the time in at least 20
proceedings to the Physician Advisory
Committee.
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WHAT ALTERNATIVES ARE
AVAILABLE?
• Any contractual remedies
– Arbitration fees are capped at $1000
for physicians in groups of less than 5
• ERISA claimants still have the
option of going to federal court.
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Medical Necessity Disputes
– generally, state law will
be better except for
definition of medical
necessity.
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Definition of Medical Necessity
• Patients are entitled to receive medically
necessary care as determined by a physician
exercising clinically prudent judgment in
accordance with generally accepted
standards of medical practice.
• Cheaper alternatives are permissible only
when they are “at least as likely to produce
equivalent therapeutic or diagnostic
results.”
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Medical Necessity Dispute
Resolution Process Overview
• Independent external review of determination that
services are not medically necessary or are
experimental or investigational will be available
for physicians by August 6, 2004 or as soon
thereafter as practicable.
• However, patient pursuit of ERISA suit will trump
physician’s rights to external review.
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Medical Necessity Dispute Resolution
Process Overview (cont.)
• Will meet ERISA timeframes for internal appeals
and on physician’s request will consult specialist in
same specialty.
• Internal process must be exhausted.
• Must pay $50 filing fee – or lesser of $250 or
external review organization’s fee for matters
requiring pre-certification.
• Optional – but binding if used.
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Compliance Disputes
Any other disputes over enforcement of the
Agreement must be:
• Submitted on the Compliance Dispute Claim Form
• Sent to the Compliance Dispute Facilitator, Julia
Stewart, and
• Filed within 30 days of the date the Compliance
Dispute arose.
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Compliance Disputes (cont.)
• Compliance disputes may be filed by Class
Members who have been adversely affected
by Aetna’s failure to comply with the
injunctive relief set forth in the Settlement,
or by any Signatory Medical Society on
behalf of such a Class Member.
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Compliance Disputes (cont.)
• The Compliance Dispute Facilitator must refer
cases to the Compliance Dispute Review Officer if
she determines the dispute is:
1) not frivolous;
2) sufficiently alleges adverse impact to a class
member;
3) cannot be easily resolved by the Facilitator
herself; and
4) is not a billing or medical necessity dispute.
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Compliance Dispute Review Officers
Aetna: Rodney A. Max
Mr. Max is licensed to practice law in the States of Alabama and
Florida. He has established a highly successful national mediation
practice specializing in mass torts, class actions and complex tort,
commercial and consumer cases. He has mediated in 26 different
states and the District of Columbia. For his complete biography, go to
http://www.uww-adr.com/2004/pdfs/ramprofile-pdfupdate.pdf.
CIGNA: Tom Schultz
Tom Schultz is a partner with Ferrell, Schultz, Carter and Fertel in
Miami, Florida. He is a widely recognized civil litigator and a fellow
of the American College of Trial Lawyers. For more information on
his many accomplishments, go to www.ferrellschultz.com.
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Compliance Disputes (cont.)
• The Facilitator will prosecute compliance disputes
without charge to physicians, unless the physician
or medical society objects.
• Compliance Dispute Review Officer will then
attempt to mediate the dispute if each side
requests.
• If not resolved within 90 days, each side must
submit a written memorandum describing their
position and the remedies they think are
appropriate.
• At either party’s request, the Review Officer will
hold oral argument.
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Compliance Disputes (cont.)
• The Compliance Dispute Review Officer
must issue a written decision, including
appropriate remedies as necessary.
• Either side may petition for a rehearing
within 10 days from receipt of the decision.
• At either party’s request, the review officer
will hold oral argument.
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Compliance Disputes (cont.)
• The Compliance Dispute Review Officer’s
decision may be appealed to Judge Moreno
who will decide whether the Review
Officer’s decision was arbitrary, capricious,
an abuse of discretion or otherwise not in
accordance with the law or the Settlement.
• Judge Moreno also has the authority to
enforce the Compliance Dispute Review
Officer’s decision, if necessary.
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Signatory Medical Societies’
Continued Involvement
• Aggressive Enforcement of Settlement
Agreements
– On behalf of members for particular claims and
for instances of systemic violation of the
agreements.
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Conclusion
• The settlement agreements will require Aetna
and CIGNA to change their business practices
by adding transparency and fairness to the
claims process.
• “Sea change” in how managed care companies
do business with physicians.
• Settlement negotiations ongoing with other
companies.
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