Aetna will pay $5 million to shortchanged students
ALBANY — Health insurer Aetna Inc. will pay more than $5 million to thousands of college students across the country who were shortchanged on health care reimbursements, New York Attorney General Andrew Cuomo said Monday.
About 73,000 students at more than 200 colleges — including 20 New York schools — weren’t properly reimbursed for out-of-network care, according a settlement with the company. That includes 1,082 at the University at Buffalo and 383 at Buffalo State College.
“Students were particularly vulnerable to being cheated because they placed their trust in health care plans sponsored by their colleges,” Cuomo said in a written statement.
Cuomo says Aetna’s subsidiary, Aetna Student Health, used an outdated reimbursement rate to pay students and doctors.
The investigation covered payments for care between 1998 and April 1, 2008.
Under the agreement, the Hartford, Conn.-based insurer will also update the claims processing system for students.
“Aetna learned that Chickering, an independently operated subsidiary, had underpaid some student health claims from providers who were not part of its network,” said Cynthia Michener, an Aetna spokeswoman. “The affected claims represent only 3 percent of the overall Chickering claim volume.”
Chickering is Aetna Student Health. The miscalculations were caused by Chickering using old data tables, but the company has since corrected the process, Michener said.
More than $2 million of the claims were from nearly 21,000 students in New York. UB had the most students involved of any school in the state outside New York City, but other schools included Cornell University, Columbia University, New York University, Skidmore College, Albany Law School, Rochester Institute of Technology and Brockport State College.
Chickering’s information came from Ingenix, a subsidiary of UnitedHealth Group that maintains databases with “usual and customary” rates used by the entire health insurance industry to calculate out-of-network reimbursements.
Those databases have been under fire by doctors for years for allegedly low-balling the rates, prompting an investigation by Cuomo that led United- Health to agree last month to abandon them and instead fund new databases to be maintained by an independent nonprofit. Aetna also agreed to fund the new service, and the current probe into Aetna Student Health resulted from the earlier investigation.
Aetna will pay students, or in some cases, their doctors, more than $5.1 million for underpayments, plus interest and penalties calculated under governing state law. Late payments in New York are subject to 12 percent interest. The insurer is responsible for tracking down the students.
Aetna also agreed to hire an independent examiner to monitor the company’s compliance and training procedures. All Aetna employees will receive improved training on reimbursement obligations.
News Business Reporter Jonathan
D. Epstein contributed to this report.
Log into MyBuffalo to post a comment
MyBuffalo is the new social network from Buffalo.com. Your MyBuffalo account lets you comment on and rate stories at buffalonews.com. You can also head over to mybuffalo.com to share your blog posts, stories, photos, and videos with the community. Join now or learn more.
Reader comments