In Separate Cases, Aetna, HIP Partner Face Tough Battles

Aetna U.S. Healthcare promises a vigorous appeal of a California jury's record $120 million award to the widow of a man who sought coverage of experimental treatment for a rare stomach cancer. While calling David Goodrich's death a tragedy, Aetna denied the implication that its actions shortened his life; Aetna says the progression of his disease made Goodrich an inappropriate candidate for high-dose chemotherapy. Aetna could ultimately be held responsible because Goodrich was a government employee — thus bypassing liability exclusions granted by the federal Employee Retirement Income and Security Act.

Across the continent, the company that until recently provided care for HIP Health Plan of New Jersey members is itself tangled in a stew of litigation. PHP Healthcare faces several provider lawsuits over unpaid bills, and now the U.S. attorney has been asked to review perks PHP executives received while the company was skidding toward bankruptcy.

According to court documents, PHP managers indulged in the kind of corporate greed that has given managed care a poor public image: luxury cars, private planes, double-digit raises. PHP claims HIP's mismanagement, not its own spending, brought on its woes.