Aetna 2008 Annual Report Download - page 83

Annual Report - Page 78
physicians groups in the United States who were entitled to receive payments from us at any time from January 1,
2005 to the present and were paid less than the amount they billed our members. The plaintiffs seek recalculation
and reimbursement of unpaid benefits, unspecified damages and treble damages, statutory penalties, injunctive and
declaratory relief, plus interest, costs and attorneys’ fees, and seek to remove us as a fiduciary of any benefit plan
that is subject to ERISA. We have notified the Multi-District Litigation panel of this new matter in connection with
our existing request to consolidate the pending out-of-network litigation against us. We intend to defend this case
vigorously.
On January 15, 2009, Aetna and the New York Attorney General announced an agreement relating to an industry-
wide investigation into certain payment practices with respect to out-of-network providers. The agreement provides
that Aetna will contribute $20 million towards the establishment of an independent database system to provide fee
information regarding out-of-network reimbursement rates. When the new database is ready, Aetna will cease using
databases owned by Ingenix and will use the new database for a period of at least five years in connection with out-
of-network reimbursements in those benefit plans that employ a reasonable and customary standard for out-of-
network reimbursements. In February 2009, Aetna agreed with the New York Attorney General and the Texas
Attorney General to reimburse college student members for approximately $5 million of claims relating to care
rendered by out-of-network providers.
We also have received subpoenas and/or requests for documents and other information from other attorneys general
relating to our out-of-network benefit payment practices.
It is reasonably possible that others could initiate additional litigation or additional regulatory action against us
and/or one or more of our competitors with respect to benefit payment practices.
Securities Class Action Litigation
Two purported class action lawsuits were pending in the United States District Court for the Eastern District of
Pennsylvania (the “Pennsylvania Federal Court”) against Aetna and certain of its current or former officers and/or
directors. On October 24, 2007, the Southeastern Pennsylvania Transportation Authority filed suit on behalf of all
purchasers of Aetna common stock between October 27, 2005 and April 27, 2006. The second lawsuit was filed on
November 27, 2007, by the Plumbers and Pipefitters Local 51 Pension Fund on behalf of all purchasers of Aetna
common stock between July 28, 2005 and July 27, 2006. On June 3, 2008, plaintiffs in these two lawsuits filed a
consolidated complaint in the Pennsylvania Federal Court on behalf of all purchasers of Aetna common stock
between October 27, 2005 and July 27, 2006. The consolidated complaint (the “Securities Class Action Litigation”)
supersedes and replaces the two previous complaints. The plaintiffs allege that Aetna and four of its current or
former officers and/or directors, John W. Rowe, M.D., Ronald A. Williams, Alan M. Bennett and Craig R. Callen
(collectively, the “Defendants”), violated federal securities laws. The plaintiffs allege misrepresentations and
omissions regarding, among other things, our medical benefit ratios and health plan pricing practices, as well as
insider trading by Dr. Rowe and Messrs. Bennett and Callen. The plaintiffs seek compensatory damages plus
interest and attorneys’ fees, among other remedies. The Defendants intend to vigorously defend the Securities Class
Action Litigation, which is in its preliminary stages.
Other Litigation and Regulatory Proceedings
We are involved in numerous other lawsuits arising, for the most part, in the ordinary course of our business
operations, including employment litigation and claims of bad faith, medical malpractice, non-compliance with state
and federal regulatory regimes, marketing misconduct, failure to timely or appropriately pay medical and/or group
insurance claims, rescission of insurance coverage and other litigation in our Health Care and Group Insurance
businesses. Some of these other lawsuits are or are purported to be class actions. We intend to defend these matters
vigorously.
In addition, our current and past business practices are subject to review by, and from time to time we receive
subpoenas and other requests for information from, various state insurance and health care regulatory authorities and
attorneys general, the Office of the Inspector General, and other state and federal authorities, including the
investigation by, and subpoenas and requests from, attorneys general described above under “Out-of-Network
Benefit Proceedings.” There also continues to be heightened review by regulatory authorities of and increased
litigation regarding the health care benefits industry’ s business and reporting practices, including utilization