Here’s one more settlement and it’s affect on profits and I must say that for their time and what Ingenix was doing with their algorithms they had money from both sides, first from the short payments and secondly from other companies like Aetna and Health Net for another licensing the use of the customary fees and charge software.  This is the AMA class action lawsuit that finally settled as United settled their own first and there’s most lawsuits out there floating around over this as well with tentacles everywhere as surgical centers and more filed their own cases.  Here’s the back link on the Aetna settlement and it certainly says one thing today, get to know and see your algorithms.  You have to admit the Ingenix algorithms had some profit making algos that ran for many years but of course it hurt the doctors, hospitals and consumers with flawed data. 

One More Court Case Settles for $120 Million With Aetna For Around To 13 to 15 Years of Short Paying Doctors Using Defunct United Healthcare (Ingenix) Data Base for Out of Network Reimbursements

Ingenix Data Base Has Some Long Reaching Legal Tentacles with Aetna, Blue Cross, Blue Shield, Humana


As a matter of fact, one state, New Jersey and their legislature has become smarter in that area too with asking to see the “algorithms” and not the song and dance that substantiates rate increases.  Here’s a clip of the wording use and they want the algos that create the development of the software, and this is the same type of stuff the SEC needs to after for that matter if we can every get past the old paradigm that an attorney is the best occupational area to select an individual from to run the place.

New Jersey Legislature Getting Smart– Bill to Modify Claim Procedures to Include Asking For Insurance Company Algorithms-Bill A3334

Some of the new areas in addition to buying up health payer technology companies include become a partner with Costco to sell their insurance in California and a few other states and you can find their software they are selling to consumers in Best Buy, mostly tracking and financial offerings there.  In addition they also bought Coventry Healthcare last year for $5.7 billion.  Doctors in California also have an active lawsuit in progress that goes back again to out of network payments and some of these doctors had patients receive letters telling them their doctors were no longer in network and that was an error to be corrected and in Texas (video at link) about 130 doctors were told they were no longer going to be on contract with Aetna.  These are just a few examples and complexities are there with all insurers and is is any wonder the states are telling the Feds, '”go ahead and negotiate with the insurers and set up the exchange”….nobody wants to do the complex contract negotiations and have their head on the block if and when paying claims or some other function creates discrepancies with the algorithms that run the working formats of the IT infrastructure laid out in the contracts. 

Costco Selling Aetna Health Insurance Plan to Members–A Few Days Ago Costco Became a Pharmacy Benefit Manager

California Doctors Sue Aetna For Routinely Denying Out of Network Patient Access–Grading on the Curve Algorithms Versus Individual Patient Assessments?

Things also get interesting here with intellectual properties with a former software partner now suing them for patent violations, HealthTrio filed a suit that has to do with their personal health record offering technologies. 

HealthTrio Files Suit Against Aetna Over PHR and HIT Technology Patent Violations

Down where I am at the in the OC they are pretty involved with Health IT in the medical records business with their purchase of Medicity which was already being implemented at Hoag Hospital at the time of purchase.  With United Healthcare buying up the big physician associations here in the OC and up in Long Beach, this gets interesting with putting all the IT infrastructures together. 

In case of something going really out of whack they do have a reinsurance plan in the Cayman Islands in place and I think it is still there to cover any Medical Loss Ratios that hit 104% or more.  In addition to keep up with the competition we have yet another purchase PayFlex which is a health savings plan software platform.  They may have a ways to go their to compete with United/Optum Bank  as they have their own bank with over a billion on deposit from Health Savings Accounts. 

So again today if you just look at health insurers being only that, look again as many have Health IT tentacles all over the place and they all have dueling algorithms for profit.  Doctors don’t care much for this as those algorithms always hit them in the pockets and the provisions of contract change so much some have a hard time figuring out exactly what they do want as more roll out pay for performance efforts substantiating the myth that this will save huge amount of money, small amounts possibly but not huge and of course insurers with their Health IT interests want to make sure their software for hospitals and doctors meets the current certification standards too through the government ONC office division of HHS. .  Again I think Aetna is playing catch up here to United as well as they have 3 that I can think of, EHR systems they sell.  BD

HARTFORD, CT – Aetna reported fourth quarter 2012 earnings today that were 49 percent lower than 2011, as the nation’s third largest insurer took one-time charges related to the settlement of a $120 million reimbursement settlement announced last month.

Fourth-quarter operating earnings were $317.0 million, or $0.94 per share, while full-year earnings totaled $1.77 billion, or $5.13 per share. Net income for the fourth quarter of 2012 was $190.1 million, or $0.56 per share, and includes $0.44 per share of charges for other items, primarily a litigation-related settlement, offset by $0.06 per share of net realized capital gains. Full-year net income was $1.66 billion, or $4.81 per share.

Rohan will continue to lead Aetna’s integration efforts for its proposed acquisition of Coventry, which is expected to close in mid-2013.

“The management changes we are making ensure that we have Aetna’s strongest leaders focused on driving our growth strategy across our core and emerging businesses,” said Bertolini. “We have a unique opportunity to drive positive change in the healthcare marketplace by fundamentally changing the relationship between health plans, providers and patients to one focused on improving the quality of care as a way to reduce costs.”


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