Aetna

By the end of the summer, one in 12 Americans will be covered by a single health insurance company, Aetna-U.S. Healthcare, under a proposed merger approved yesterday by federal regulators.Connecticut-based Aetna, already the nation's largest health plan, will increase its membership by 50 percent, to 21 million, now that the Justice Department has given the green light to the company's proposed takeover of the Prudential Insurance Co. of America's health care division.As part of the $1 billion deal, regulators are requiring Aetna to sell a portion of its health maintenance organization business in Dallas and Fort Worth, Texas.

The Maryland Insurance Administration has fined an HMO $100,000 for arbitrarily "downcoding" claims submitted by a doctor -- that is, paying for a routine office visit when the doctor performed additional services.Half of the fine will be suspended if NYLCare Health Plan of the Mid-Atlantic complies with insurance rules for the next year, said Insurance Commissioner Steven B. Larsen.As part of the terms of the consent decree issued by Larsen and not challenged by NYLCare, the health maintenance organization has appointed a compliance officer to make sure it follows the rules.

Aetna U.S. Healthcare's pending billion-dollar acquisition of Prudential's health business would create the country's largest health insurer -- covering one American in 12 -- and prompts scrutiny of whether it would exert too much power over patient care and providers.As federal antitrust regulators review the deal, Aetna says it offers economies of scale and expanded medical networks. "We think it's really going to help consumers a great deal," said Walt Cherniak, an Aetna spokesman.Critics, led by physician groups including Maryland's state medical society, say the deal will give Aetna enough market dominance to allow it to bully doctors and patients.

The Chapman Co. said yesterday that Aetna Retirement Services Inc. has agreed to market the Baltimore-based brokerage and investment banking firm's mutual fund to nearly 2 million customers.The alliance could bring millions more dollars into the 10-month-old mutual fund, called the Chapman DEM Equity Fund, which has $11 million in assets under management."We are expecting some pretty significant growth," said Nathan A. Chapman Jr., president of Chapman Co., which manages more than $600 million for clients.

I'M WATCHING a video, recorded in February 1997 for training purposes by Aetna U.S. Healthcare, one of the nation's largest health insurance companies. It should scare everyone who has company-paid health or disability insurance. You're at more risk than you think of not getting the care you need.Under current law, most patients in most states cannot sue their company plans for damages. Too bad if you die because your plan delayed or denied treatment. Too bad if you're refused disability benefits you should have had. The plan isn't liable.

An article in Thursday's business section about HMOs that offer a Medicare plan in Maryland should have included the Kaiser Permanente health plan.The Sun regrets the error.A decision by Aetna U.S. Healthcare to leave the Medicare HMO market in Maryland -- taking with it the NYLCare plan that Aetna acquired about a month ago -- will leave about 19,000 Marylanders over 65 seeking alternative coverage.Aetna and NYLCare Medicare members will have three choices, Walt Cherniak, an Aetna spokesman, said yesterday:Enroll in another Medicare HMO. There are four other Medicare HMOs in Maryland.

Aetna Inc., the largest U.S. health insurer, said yesterday that it will stop offering its Medicare health maintenance organization plans in six states, including Maryland.The company said it decided to end its participation in Medicare HMOs in some areas when it determined it could no longer afford to offer certain benefits, such as reimbursement for prescription drug costs. The decision will affect 58,000 customers, said Hartford, Conn.-based Aetna. The other states are Delaware, Massachusetts, New Hampshire, Rhode Island and Virginia.

Aetna Inc.'s purchase of New York Life's health plans, announced yesterday, will strengthen Aetna in the Baltimore-Washington region, where it will be the third largest health insurer with more than 1 million subscribers.But customers will see no immediate difference. Aetna plans to take its time merging its networks and products with New York Life's health plans, which are called NYLCare."The integration will be on a market-by-market basis over a two to two-and-a-half-year period, with the smaller markets assimilated earlier," said Molly Knorr, general manager for the Baltimore market for Aetna U.S. Healthcare, Aetna's health unit.

Aetna Inc., the giant health insurer, is expected to announce today that it is buying the health care business of New York Life Insurance Co. for $1.05 billion in cash.Reflecting some of the negotiating that has gone into the deal and some of the uncertainties in the health care business, Aetna has agreed to pay New York Life as much as $300 million more if the unit, NYLCare Health Plans, meets certain growth targets in the next two years, people close to the transaction said.The deal would significantly increase Aetna's market share in metropolitan New York, in the Washington-Baltimore area and in Texas.

Aetna U.S. Healthcare came under fire from the American Medical Association yesterday in the wake of complaints from doctors in six states that the health insurer's contracts are illegal and compromise patient care.If the alleged problems are not corrected, the AMA may file a lawsuit to try to force Aetna to make changes, the association said yesterday.In a letter to Aetna, the doctors' group contends that the contract allows insurance company officials to override patient care decisions without an avenue of appeal.