Aetna Agrees to $250,000 Settlement of Eating Disorder Coverage Claim

June 3, 2008 ( - Aetna has agreed to a $250,000 settlement of a lawsuit over the extent to which it will cover treatment of eating disorders.

A New Jersey Law Journal news account said the insurer’s payment would be allocated to as many as 100 Garden State policyholders with claims for treatment of anorexia and bulimia. The company also agreed to loosen its standards for paying future eating disorder claims.   

The federal court class action suit sought to equalize benefits for eating disorders and those already extended for biologically based mental illnesses (BBMI) such as schizophrenia (See Eating Disorder Coverage Suit Moves On as ERISA Case ). According to the settlement: “Aetna shall cover claims submitted by Aetna insureds for the diagnosis, care and treatment of eating disorders in the same manner as biologically based mental illnesses.”

Under the pact, Aetna also will set up panels of doctors approved by the plaintiffs’ lawyers to review coverage denials and the findings would be binding on all parties. Under the new procedure, anyone whom Aetna determines to have no medical necessity for enhanced eating disorder treatment during the next four years would have the right to opt for binding review by an independent eating disorder specialist selected by plaintiffs’ lawyers, subject to approval by the company.

In the meantime, 85 to 100 eating disorder claimants turned down by Aetna in the past seven years would receive reimbursements worth an estimated total of $250,000, the settlement says. The company also would pay up to $350,000 in legal fees to the law firm that brought the suit and pay $10,000 to the two lead plaintiffs.

The settlement still needs court approval.

Meanwhile, lawyer Eric Katz said he has been retained by an Aetna case plaintiff to urge the court to reject the pact. Katz is critical of the settlement’s restriction of future BBMI benefits to claimants in “fully insured” plans – funded by employers. Because of that restriction, there will be no relief for hundreds of thousands of people in self-funded plans, such as employee welfare and state worker health benefit programs, Katz said, according to the Law Journal.

The case is DeVito v. Aetna Inc . , civ -07-418.