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Aetna suit alleges out-of-network reductions

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NEWARK, N.J.--Aetna Inc. is facing a lawsuit seeking class action status alleging that the health insurer improperly reduced benefits for out-of-network services.

The lawsuit, filed July 30 in the U.S. District Court for the District of New Jersey, seeks to represent a class of Aetna members in group health plans subject to the Employee Retirement Income Security Act of 1974 who received adverse benefit determinations from July 30, 2001, to the present.

Plaintiff Michele Cooper and her husband received lower health insurance benefits because Aetna units improperly calculated the usual, customary and reasonable fees for out-of-network providers, according to the lawsuit. Under the Hartford, Conn.-based insurer's policy, the member is financially responsible for the difference between the UCR and the provider's billed charge, the lawsuit stated.

In a statement, Aetna disputed the allegations and said the lawsuit has no merit. "Reimbursement of nonparticipating providers is a complex issue, and Aetna strives to implement policies that are in the best interests of its members and employers who purchase benefits plans," the company said in its statement.

In June, the New Jersey Department of Banking and Insurance filed an administrative order levying a $9.5 million fine against Aetna for refusing to appropriately cover certain services provided by out-of-network providers--including emergency treatment--in violation of New Jersey rules and regulations. Aetna is requesting a hearing on the order, a spokeswoman said.

The action that led to the department fine was one of many methods used by Aetna to underpay out-of-network benefits, said Barry Epstein, a member of the class action litigation team of Wilentz, Goldman & Spitzer and lawyer for the plaintiffs. "Our allegations are broader," he said.

According to the lawsuit, Aetna has sometimes determined UCR rates by using databases owned and operated by Ingenix Inc., a unit of Minnetonka, Minn.-based UnitedHealth Group Inc., that are pre-edited to exclude high-cost services. "Aetna uses the Ingenix databases to price UCR even though the databases are inherently flawed and invalid for UCR and skew UCR amounts downward," the lawsuit stated.

Ingenix is not named as a defendant in the Aetna lawsuit, although a similar lawsuit has been filed against parent company UnitedHealth, Mr. Epstein said. Similar ERISA claims have also been filed against Philadelphia-based CIGNA Corp. and Los Angeles-based Health Net Inc., he said.A spokeswoman for Ingenix could not be immediately reached for comment.

The Aetna lawsuit asks the court to declare that the company violated its obligations under ERISA, federal common law and federal claims procedures. The lawsuit asks for an injunction barring Aetna from using the Ingenix databases or making UCR determinations in the absence of valid and reliable data.