Texas deal with Aetna HMO looks promising for patients

Staying Ahead

May 14, 2000|By JANE BRYANT QUINN

Is the patient-protection deal Texas struck with the managed-care behemoth, Aetna U.S. Healthcare, really good for consumers?

That question matters, because the agreement is being touted as a model for Aetna and other HMOs nationally.

To me, the approach looks promising. Patients should get fairer treatment and more avenues for pursuing disputes.

This story began in 1998, when Texas filed suit against Aetna and three other insurers, Humana, PacifiCare and NYLCare. The state claimed that, through their financial incentives, they were effectively pushing doctors to cut back on necessary medical care.

The most deadly incentive is the "withhold." An insurer might withhold, say, 25 percent of a medical group's compensation. At the end of the year, the group may or may not get the full amount. The doctors' earnings can be docked, if their patients cost too much to treat.

Doctors might also minimize treatment if the insurer pays them too low a fee for every patient they see. The insurer itself can limit care, by declaring that a particular treatment isn't "medically necessary," or isn't covered by the plan.

Lately, Aetna hasn't been in terrific financial shape. Its stock has plunged; its chief executive officer has been replaced.

Like many other HMOs, it faces major class action lawsuits from consumers who claim that they didn't get the proper care. Its practices are also being investigated in other states.

With the Texas settlement, Aetna hopes to start shaking off these problems.

The agreement contains much that's good for consumers, with some caveats, says Lisa McGiffert, senior policy analyst for Consumers Union in Austin. For example:

Aetna will hire an ombudsman to handle patient complaints. That person will report to each Aetna HMO's board of directors, rather than to management. Texas' attorney general will track the results.

The unanswered question is whether the ombudsman can really be independent, amid all the overt and subtle pressures that Aetna's staff can bring.

With much fanfare, the Texas Legislature created an independent HMO ombudsman in 1997. Then it refused to provide the money to fund the office. Consumers got nothing more than a press release.

Will Aetna's ombudsman merely dispense information to patients, like a living press release? Or will patients find a champion?

All insurers cover only treatments that are "medically necessary." Aetna's Texas brochures and contracts will be clearer about what that means, as well as about what's excluded from the plan.

"Consumers will get some relief from the shell game, where `medical necessity' is whatever an HMO says at the time," says Linda Eads, Texas' deputy attorney general for litigation.

Doctors object that Aetna makes the final decision on whether to cover certain treatments. "Aetna has agreed to consult experts, but not necessarily someone in the same specialty as the physician recommending the treatment," says Dr. Timothy Flaherty, vice chair of the American Medical Association's board of trustees.

There's another angle here. In 1995, Texas set up an independent review board for medical decisions. If an HMO denied payment, on the ground that a treatment wasn't "medically necessary," patients could appeal.

Aetna - yes, Aetna - has been fighting that law in court.

But the insurer is participating voluntarily in this kind of external review, not just in Texas but in all states, says Dr. Arthur Liebowitz, Aetna's chief medical officer.

Aetna will allow external appeals in Texas if it denies or reduces payments for reasonable emergency treatment, for experimental treatments, for prescription drugs (when plans include them) or for eligible patients who are denied a standing referral to a specialist.

Aetna agreed not to offer financial incentives that might lead doctors to limit needed care. But guess what? Some medical groups withhold money from individual doctors to enforce budget targets.

Texas came up with a creative solution. Aetna will tell its participating medical groups to eliminate these kinds of incentives.

If they won't, the incentives must be disclosed, so that Aetna can tell patients. If the groups won't disclose, Aetna has to report that, too.

But will that cause these doctors to drop Aetna and sign up with competing HMOs?

Texas dropped its suit against Aetna and hopes to bring other HMOs into the deal. For its part, Aetna will probably extend some of the new Texas rules to other states.

Now, we'll see how well this works.

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