DALLAS (AP) -- Aetna U.S. Healthcare has agreed to stop rewarding or fining doctors over whether they limit patients' health care, settling a lawsuit filed by the state of Texas with a deal that could become a model for other HMOs.
Texas Attorney General John Cornyn and Aetna were to announce details of the settlement Tuesday."The bottom line is this settlement places medical decisionmaking in the hands of doctors and their patients, and Texans can rest assured that doctors won't be penalized for elevating patient needs above HMOs," Cornyn said.
He said in a draft of a letter to state lawmakers that Aetna has agreed to settle the lawsuit and take steps that will end any financial incentives to limit needed care to HMO members.
Republican Cornyn's Democratic predecessor, Dan Morales, sued Aetna and five other HMOs in 1998, accusing them of illegally compensating doctors who limited patients' medical care and penalizing those who didn't.
Aetna, under the settlement, is prohibited from fining doctors who exceed medical budgets or giving them bonuses for staying within limits. The state's largest HMO also will have to report if doctors' groups in its plan do give financial incentives.
"A lot of what is embodied in the agreement is not new business practices," Arthur Leibowitz, Aetna's chief medical officer, said.
The settlement was expected to quickly become a role model in other states, said Rocky Wilcox, chief counsel of the Texas Medical Association.
"It'll get all over the country real fast," said Wilcox.
The settlement contains no finding of fault, fines or penalties. And Aetna denies any wrongdoing in the agreement that ends its involvement in the 1998 lawsuit. Morales had sought to fine Aetna $10,000 per violation for offering financial incentives for the medical care that physicians provide their patients.
Cornyn said he would use the agreement as a model. If the other HMOs named in the lawsuit do not agree to the terms, the attorney general said, he will try them in state district court. The HMOs are Humana Health Plans of Texas, PacifiCare of Texas, NYLCare Health Plans of the Southwest and NYLCare Health Plans of the Gulf Coast.
Aetna said it decided to settle the lawsuit and accept state regulatory oversight because it will help restore the public's trust in managed care, said David Simon, the company's chief legal counselor.
The company has 960,000 Texans in its HMO and 2.4 million members enrolled in all of its health-care programs.
"We felt like if we could achieve this landmark settlement with Aetna, then Aetna's competitors would then know this would set the standard for them as well," said Cornyn.