Newsletter

Aetna — UCR Action Memo

RE: AETNA UCR LITIGATION/ Non-Par Provider Proposed Settlement Agreement

Action Required by February 26, 2014

We are contacting our clients with respect to a proposed settlement agreement that is being circulated in connection with class action lawsuits consolidated under the case caption In re Aetna UCR Litigation, pending in the United States District Court for the District of New Jersey, Master Docket No. 07-3541 (the “AETNA Class Action”). As you may be aware, many providers have received notices advising providers of their rights to participate in the class action or opt out. A copy of the Notice is attached hereto for your convenience. We are contacting you to advise you of the serious consequences that may occur if you decide not to opt out. The deadline for a response is February 26th, 2014.

By brief way of summary, the insurance company, Aetna, has agreed to settle a class action lawsuit wherein it was alleged that the health insurer paid inadequate reimbursements for out-of-network medical providers by using faulty databases and other methods to determine the amounts paid. We have attached a copy of the comprehensive agreement as well. It has been our experience that these settlement agreements, with respect to these type of actions, have been interpreted in a fashion highly prejudicial to medical care providers and have severely hampered their efforts to recover on claims that have accrued before and after similar settlement agreements have been finalized.

One of the best examples is a similar lawsuit that was commenced against the insurer Empire. In Love v. Blue Cross Blue Shield Association, Civil Action No. 03-CV-021296 (S.D.Fla.), a class action was commenced in the Southern District of Florida (the “Love District Court”) in which various health care providers made claims against the insurer Empire contesting Empire’s use of “a database” to determine “usual, customary, and reasonable” reimbursement amounts for services allegedly rendered by out-of-network basis to Empire members. The settlement agreement provided substantial prospective and retrospective relief in exchange for, among other things, the release by class members (the “Releasing Parties”) of “Released Claims.” In its Final Order, the District Court permanently enjoined all Releasing Parties from “filing, commencing, prosecuting … [or] participating in … any lawsuit … based on any or all Released Claims.” Final Approval Order ¶ 9.  The Love settlement has been applied in many instances to block or preclude providers from making claims, even with respect to services rendered after the date of settlement.

There are similar features between the Empire settlement and that which is proposed with respect to Aetna. For example, there is a very formal process in which providers must submit claims and demonstrate proof of claims. This process will be the exclusive means of remedy to any party that participates in the class action. (See e.g. “Prove-Up” portion of agreement). There will also be a “Settlement Administrator” whose powers will be uncertain, as well as what recourse any provider will have with respect to challenges in that administrator’ determinations.  There is a provision that provides that there can be no balance billing on claims subject to the settlement.  Perhaps the most important open issue is with respect to the impact the release portion of the agreement will have as to future claims. The Release provides that “The Releasors further agree to abandon forever and discharge any and all claims that were or could have been alleged in the Actions against the Released Persons in connection with the Released Claims, whether any such claim was or could have been asserted by any Releasor on its own behalf or on behalf of other persons.” The release offers no guidance as to the import of the type of claims that are reserved or capable of being filed thereafter.  There have been cases that have asserted that the mere allegation of a pattern of under compensation is the type of allegation in which release language such as herein cannot be re-litigated. See In re Managed Care Litigation, 2011 U.S. Dist. LEXIS 46822 (S.D.Fla. Mar. 8, 2011) (order adopting magistrate judge report and recommendation enjoining plaintiffs lawsuit under settlement agreement in which it was alleged that insurer was seeking to “systematically under-compensate nonparticipating providers for medical services they rendered.”)

In light of the fact that there may be a limited recovery and that there is no way to guarantee how the Aetna settlement will affect prospective claims, we think serious consideration should be given to seeking to be excluded from the class and preserving any present and future claims that a provider may have.   It is significant to note, however, that the Aetna agreement purports to settle claims back to 2001, which is far beyond the statute of limitations.  You cannot pursue claims that old outside of the settlement agreement.  If you choose to exclude yourself from the class you must do so by February 26, 2014.  If you wish to participate in the settlement you must submit a claim form by March 28, 2014.  Either way you need to take action.  If you would like to discuss this further, please feel free to email Tim Butler at TButler@tkblaw.com or Mario Cometti at MDCometti@tkblaw.com

AETNA – UCR Proposed Settlement

Aetna Notice of Proposed Settelment and Form