Aetna 2009 Annual Report Download - page 85

Annual Report – Page 79
It is reasonably possible that others could initiate additional litigation or additional regulatory action against us with
respect to our out-of-network 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 our
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 our 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. On June 9, 2009, the Pennsylvania Federal Court granted Aetna’ s motion to dismiss the consolidated
complaint. On July 7, 2009, the plaintiffs filed a notice of appeal of the Pennsylvania Federal Court’ s order dismissing
the consolidated complaint. On February 11, 2010, the Third Circuit Court of Appeals conducted oral arguments on
the plaintiff’ s appeal. The Defendants intend to vigorously defend themselves against the claims brought in the
Securities Class Action Litigation.
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 (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 current and past business practices are subject to audit and 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. These
reviews, subpoenas, and other requests include inquiries by, and testimony before, certain members, committees and
subcommittees of the U.S. Congress regarding certain of our business practices, including our overall claims
processing and payment practices, our business practices with respect to our small business customers (such as rating
information, premium increases and medical benefit ratios), executive compensation matters and travel and
entertainment expenses, in connection with their consideration of health care reform legislation, 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 benefits industry’ s business and reporting practices, including utilization
management, complaint and grievance processing, information privacy, provider network structure (including the use
of performance-based networks), delegated arrangements, rescission of insurance coverage, limited benefit health
products, pharmacy benefit management practices and claim payment practices (including payments to out-of-network
providers). As a leading national health care benefits company, we regularly are the subject of such reviews. These
reviews may result, and have resulted, in changes to or clarifications of our business practices, as well as fines,
penalties or other sanctions.
We are unable to predict at this time the ultimate outcome of the matters described above, and it is reasonably possible
that their outcome could be material to us.