Aetna 2012 Annual Report Download - page 133

Annual Report- Page 127
of any such refunds or adjustments on the actuarial soundness of our Medicare Advantage bids, or whether any
RADV audit findings would cause a change to our method of estimating future premium revenue in bid
submissions to CMS for the current or future contract years or compromise premium assumptions made in our bids
for prior contract years or the current contract year. Any premium refunds or adjustments resulting from regulatory
audits, whether as a result of RADV or other audits by CMS, the OIG or otherwise, could be material and could
adversely affect our operating results, financial position and cash flows.
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 litigation related to the proposed acquisition of Coventry, 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 (including post-payment audit and
collection practices), rescission of insurance coverage, improper disclosure of personal information, patent
infringement and other intellectual property litigation 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 vigorously defend
ourselves against the claims brought in these matters.
In addition, our operations, current and past business practices, current and past contracts, and accounts and other
books and records are subject to routine, regular and special investigations, audits, examinations and reviews by,
and from time to time we receive subpoenas and other requests for information from, CMS, the U.S. Department of
Health and Human Services, various state insurance and health care regulatory authorities, state attorneys general
and offices of inspector general, the Center for Consumer Information and Insurance Oversight, OIG, the Office of
Personnel Management, the U.S. Department of Labor, committees, subcommittees and members of the U.S.
Congress, the U.S. Department of Justice, the Federal Trade Commission, U.S. attorneys and other state, federal
and international governmental authorities. These government actions include inquiries by, and testimony before,
certain members, committees and subcommittees of the U.S. Congress regarding certain of our current and past
business practices, including our overall claims processing and payment practices, our business practices with
respect to our small group products, student health products or individual customers (such as market withdrawals,
rating information, premium increases and medical benefit ratios), executive compensation matters and travel and
entertainment expenses, as well as the investigations by, and subpoenas and requests from, attorneys general and
others 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 and related benefits industry’s business and reporting practices, including premium rate increases,
utilization management, development and application of medical policies, complaint, grievance and appeal
processing, information privacy, provider network structure (including the use of performance-based networks and
termination of provider contracts), delegated arrangements, rescission of insurance coverage, limited benefit health
products, student health products, pharmacy benefit management practices, sales practices, and claim payment
practices (including payments to out-of-network providers and payments on life insurance policies). For example,
New York is one of over 35 states that are investigating life insurers' claims payment and related escheat practices,
and these investigations have resulted in significant charges to earnings by other life insurers in connection with
related settlements. We have received requests for information from a number of states, including New York, and
certain of our subsidiaries are being audited, with respect to our life insurance claim payment and related escheat
practices.
As a leading national health and related benefits company, we regularly are the subject of government actions of the
types described above. These government actions may prevent or delay us from implementing planned premium
rate increases and may result, and have resulted, in restrictions on our business, changes to or clarifications of our
business practices, retroactive adjustments to premiums, refunds or other payments to members, beneficiaries, states
or the federal government, assessments of damages, civil or criminal fines or penalties, or other sanctions, including
the possible loss of licensure or suspension or exclusion from participation in government programs, such as the
intermediate sanctions previously imposed on us by CMS that are described above under “CMS Actions.”