Aetna and representatives of over 700,000 physicians, state and other medical societies received preliminary approval of the landmark settlement agreement in the national class action pending in the federal court for the Southern District of Florida. The agreement, entered into on May 21, 2003, includes industry-leading improvements to physician-related business practices that set new levels of transparency in paying claims, including a National Advisory Committee of Practicing Physicians to provide advice to Aetna on issues of importance to physicians.

U.S. District Court Judge Federico Moreno granted preliminary approval of the settlement agreement today in Miami and set Monday, October 13, 2003 as the date for the hearing on final judicial approval. Other important deadlines established by the Court in today’s hearing include an August 29, 2003 deadline for “opt-out” determinations and a Friday, September 12, 2003 deadline for all objections. An order will be drafted and issued on these findings announced by Judge Moreno in open court today.

The settlement agreement that was granted preliminary approval today, came in response to a lawsuit filed to combat widespread and chronic abuses by some of the nation’s largest for-profit health maintenance organizations (HMOs). The suit identified Aetna, as well as United Healthcare, CIGNA, Coventry, Wellpoint, Humana Health Plan, Inc, Pacificare Health Systems, Inc, & Anthem Blue Cross Blue Shield as co-conspirators who have violated contracts and defrauded doctors in violation of the federal Racketeer Influenced and Corrupt Organization Act (RICO). The lawsuit against all other defendants continues before Judge Moreno.

Co-lead counsel for the Plaintiff Physicians, Archie Lamb noted after the hearing that “this settlement agreement is truly a landmark accord that recognizes the importance of the physicians’ input in all healthcare decisions. Aetna’s agreement to be bound by the innovative industry guidelines embodied in the settlement demonstrates that only by a commitment to partnership can the true goal of quality healthcare be achieved. We are all extremely pleased with today’s prompt preliminary approval and look forward to the next step toward final judicial approval.”

The case is being heard in the United States District Court, Southern District of Florida, Miami Division: MDL No. 1334; Master File No. 00-1334-MD-Moreno. Additional background information on the case can be found online at www.hmocrisis.com . That site includes a complete copy of the settlement agreement as well as the joint press release announcing the settlement on May 21, 2003.

May 22, 2003 - Press Conference – Aetna Settlement

Remarks of AMA President-elect Donald J. Palmisano, MD As President-elect of the American Medical Association (AMA), I am pleased to be here this morning representing our physician members across the country and their patients. The AMA expects this settlement to raise the bar for the entire health insurance industry on fair and open business practices. We would particularly like to acknowledge the leadership, courage and perseverance of the individual physicians and state and county medical associations that took on managed care organizations many years ago and filed these lawsuits. It was a different environment then; and taking these legal actions was fraught with the possibility of retaliation and repercussions. Today’s announcement is proof positive that these individual physicians and their medical associations have not worked in vain. Physicians dedicated to their patients can make a difference and secure meaningful change. Numerous studies have shown that a majority of physicians believe that managed care has decreased the amount of time they have to spend with their patients, increased paperwork and administrative hassles and disrupted the patient-physician relationship. Certain health plan business practices have continued to significantly reduce physicians’ ability to act in the best interests of their patients. This agreement represents a fundamental shift in how Aetna will conduct business with patients and physicians now and in the future. We anticipate other health plans will recognize the progressive nature of this agreement if they are serious about restoring confidence in our health care system and repairing badly damaged relationships with physicians. The AMA believes some of the most significant achievements in this agreement are: the public release of policies and procedures regarding Aetna’s medical treatment decisions and payment methodology; clearly delineated appeals mechanisms for external review; formation of an independent Foundation to deal with critical health care issues; and establishment of a National Advisory Committee of Practicing Physicians to provide advice to Aetna on issues of concern to physicians. We are very pleased that Aetna has committed to expand the use of new technology to increase connectivity between physicians and Aetna’s claims processing and payment systems. Of particular importance to physicians and patients across the country is the fact that this agreement will in no way preempt federal or state laws that protect patients and physicians. The AMA would like to acknowledge the special role that Aetna’s Chairman and Chief Executive Officer Dr. Jack Rowe, a long-time AMA member, has played in bringing this settlement to fruition. We must believe that it is in no small measure a result of his own experience as a practicing physician and his commitment to patients. Aetna has made meaningful changes that will restore confidence in the integrity of Aetna’s business practices for physicians and patients. The AMA is pleased to have been part of the process that brought about this very important settlement by providing our technical assistance on numerous issues that are part of this agreement. While much divides the managed care industry and physicians, this agreement proves that there is much that we can accomplish together on behalf of America’s patients.