Aetna Accused of Reducing Out-of-Network Benefits

August 6, 2007 ( - Aetna Inc. is facing a lawsuit that claims members received lower health insurance benefits because Aetna units improperly calculated the usual, customary and reasonable fees for out-of-network providers.

Business Insurance reports the lawsuit was filed July 30 in the U.S. District Court for the District of New Jersey and seeks to represent a class of Aetna members in group health plans subject to the Employee Retirement Income Security Act (ERISA) who received adverse benefit determinations from July 30, 2001, to the present. The lawsuit claims Aetna violated its obligations under ERISA, federal common law and federal claims procedures.

The New Jersey Department of Banking and Insurance filed    an administrative order in July levying a $9.5 million fine against Aetna for refusing to appropriately cover certain services provided by out-of-network providers in violation of New Jersey regulations. An attorney for the plaintiffs in the current lawsuit said the action that led to the department fine was one of many methods used by Aetna to underpay out-of-network benefits, according to Business Insurance.

In addition, the lawsuit says Aetna has sometimes determined usual, customary, and reasonable (UCR) rates by using databases owned and operated by Ingenix Inc., a unit of 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 states, according to the news report.

While Ingenix is not named as a defendant in the Aetna lawsuit, a similar lawsuit has been filed against UnitedHealth, and ERISA claims have also been filed against Philadelphia-based CIGNA Corp. and Los Angeles-based Health Net Inc., the plaintiffs’ attorney said.

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.

Aetna issued  a statement  disputing the allegations and saying the lawsuit has no merit.