Aetna Deal May Not Cure All the Ills Troubling HMOs.

Is the patient-protection deal Texas struck with the managed care behemoth, Aetna U.S. Healthcare, really good for consumers?

That question matters, because the agreement is being touted as a model for Aetna and other HMOs nationally.

To me, the approach looks promising. Patients should get fairer treatment and more avenues for pursuing disputes. On managed care, Texas is out ahead of Congress and the other states.

Only time will tell whether Aetna's corporate culture accepts the spirit of the deal or looks for loopholes. Some doctor groups, by the way, may also have to rethink their practices.

This story began in 1998, when Texas filed suit against Aetna and three other insurers, Humana, PacifiCare and NYLCare. The state claimed that, through their financial incentives, they were effectively pushing doctors to cut back on necessary medical care.

The most deadly incentive is the "with-hold." An insurer might withhold, say, 25 percent of a medical group's compensation. At the end of the year, the group may or may not get the full amount. Their earnings can be docked, if their patients cost too much to treat.

Doctors might also minimize treatment if the insurer pays them too low a fee for every patient they see.

The insurer itself can limit care, by declaring that a particular treatment isn't "medically necessary," or isn't covered by the plan.

Lately, Aetna hasn't been in terrific financial shape. Its stock has plunged, its CEO has been replaced. Like many other HMO's it faces major class-action lawsuits from consumers who claim they didn't get the proper care. Its practices are also being investigated in other states.

With the Texas settlement, Aetna hopes to start shaking these problems off The agreement contains much that's good for consumers, with some caveats, says Lisa McGiffert, senior policy analyst for Consumers Union in Austin. For example, Aetna will hire an ombudsman to handle patient complaints. That person will report to each Aetna HMO's board of directors, rather than to management. Texas' attorney general will track the results.

The unanswered question is whether the ombudsman can really be independent, amidst all the overt and subtle pressures that Aetna's staff can bring.

With much fanfare, the Texas Legislature created an independent HMO ombudsman in 1997. Then it refused to provide the money to fund the office. Consumers got nothing more than a press release.

Will Aetna's ombudsman merely dispense information to patients, like a living press release? Or will patients find a champion?

All insurers cover only treatments that are "medically necessary." But under the agreement, Aetna's Texas brochures and contracts will be clearer about what that means, as well as about what's excluded from the plan.

"Consumers will get some relief from the shell game, where 'medical necessity' is whatever an HMO says at the time," says Texas' deputy attorney general for litigation, Linda Eads.

Doctors object that Aetna still makes the final decision on whether to cover certain treatments. "Aetna has agreed to consult experts, but not necessarily someone in the same specialty as the physician recommending the treatment," says Dr. Timothy Flaherty, vice chair of the American Medical Association's board of trustees.

There's another angle here. In 1995, Texas set up an independent review board for medical decisions. If an HMO denied payment, on the grounds that a treatment wasn't "medically necessary," patients could appeal.

Aetna -- yes, Aetna -- has been fighting that law in court.

But the insurer is participating voluntarily in this kind of external review, not just in Texas but in all states, says Dr. Arthur Liebowitz, Aetna's chief medical officer.

Aetna will allow external appeals in Texas if it denies or reduces payments for reasonable emergency treatment, for experimental treatments, for prescription drugs (when plans include them), or for eligible patients who are denied a standing referral to a specialist.

Aetna also agreed not to offer financial incentives that might lead doctors to limit needed care. But guess what? Some medical groups themselves withhold money from individual doctors, to enforce budget targets.

Texas came up with a creative solution. Aetna will tell its participating medical groups to eliminate these kinds of incentives. If they won't, the incentives must be disclosed, so that Aetna can tell patients. If the groups won't disclose, Aetna has to report that, too.

But will that cause these doctors to drop Aetna and sign up with competing HMOs?

Texas dropped its suit against Aetna and hopes to bring other HMOs into the deal. For its part, Aetna will probably extend some of the new Texas rules to other states.

Now, we'll see how well this works.

Solving the Mysteries Of Misplaced Assets

An estimated $100 billion in personal assets have been mislaid and never found. How does it happen that so much gets misplaced by so many? The people who mail you financial notices may not arrange for their envelopes to be forwarded, even though you've left a forwarding address.

Normal first-class mail, with no special instructions on the envelope should be forwarded by the post office. That's show you, get letters from your friends. But bills and checks are often handled differently. The mailer may print a short notice just above your address. The notice tells the post office what to do with the envelope, if it can't be delivered to the given address.

If the envelope says "Address Service Requested," or "Forwarding Service Requested," you should receive it at your forwarding address. Mail will not be forwarded, however, if the envelope says "Change Service Requested" or "Return Service Requested."

In August 1998, the post office started a special code called "Temp--Return Service Requested." Under Temp service, the mailer has two ways of finding you. The envelope is forwarded automatically. If it still doesn't reach you, it goes back to the mailer, with your new address attached.

But you yourself can't ask the post office to give Temp service to your bills and notices. The mailer has to preprint that particular order on the envelope. In three days of watching my mail, I didn't get one bill or notice that called for Temp service, which would have the best chance of finding me.

When mail is returned and owners don't show up, the accounts are supposed to be turned over to the state.