$120 million settlement announced in Ingenix lawsuit against Aetna

APA Practice Organization will guide eligible practitioners on settlement claims submission, likely in 2013

By Legal & Regulatory Affairs staff

Dec. 19, 2012—On Dec. 7, Aetna agreed to a proposed $120 million settlement of a class action lawsuit filed by psychologists, other health care professionals and patients in federal court in New Jersey. The APA Practice Organization (APAPO) has collaborated on the lawsuit with the New Jersey Psychological Association (NJPA), a named plaintiff, since 2009.

The lawsuit alleges that Aetna used a faulty database and underpaid claims for services delivered by out-of-network (OON) providers. According to the lawsuit, the Ingenix database that Aetna licensed to determine payment for OON services consistently understated “usual, customary and reasonable” (UCR) rates that are used as the basis for OON payment amounts – for example, 80 percent of UCR. The UCR is supposed to represent the “going rate” that health care professionals charge for their services in a particular geographic area of the country.

Aetna, United HealthCare, which owns Ingenix, and other insurers agreed in 2009 to stop using the Ingenix database pursuant to settlements with the New York Attorney General.

Under the settlement, clinicians simply need to attest that they were paid as OON providers for Aetna in any year(s) from 2003 to the present in order to claim monies from a “general” settlement fund. Eligible providers who opt to provide more detailed, claims-specific information will be entitled to receive payment from a “prove-up” fund also established as part of the settlement. In addition to health care professionals, Aetna subscribers are considered “class members” who also will be eligible to receive payments, pending final settlement approval.

The settlement must receive preliminary and final approvals from the court. After the final approval, the judge will likely set the deadline for submitting claims to the settlement fund – we expect that the deadline will be well into 2013 at the earliest. As we have done in past class action lawsuit settlements involving payments to practicing psychologists, the APA Practice Organization will provide detailed guidance for members on how and when to submit claims as soon as relevant information becomes available.

In 2009, United HealthCare agreed to a $350 million settlement with subscribers and providers, including psychologists, over the use of its Ingenix database. Additional class action suits against other companies that used this database are still pending. They include a case with California Psychological Association against the WellPoint/Anthem companies, and other cases with NJPA against CIGNA and Horizon Blue Cross Blue Shield of New Jersey. APAPO is providing extensive legal, policy, communications and other support to the state psychological associations involved with these lawsuits.

“We hope that cases like these will result in fairer reimbursement practices by the insurance companies and ultimately create greater access to mental and behavioral health services for patients,” said Katherine C. Nordal, PhD, executive director of the American Psychological Association Practice Organization.

On a related historical note, this settlement in New Jersey brings organized psychology’s string of lawsuits against managed care organizations full circle insofar as NJPA filed the first case in 1996. That case against MCC, which successfully settled in 2000, challenged “no-cause” terminations that were allegedly based on the company finding psychologists to be “not managed care compatible.”