A class-action suit alleging Aetna and other insurers shortchanged health-care providers and patients on reimbursements is on a path to a final settlement worth $120 million.

U.S. District Judge Katharine Hayden in Newark gave preliminary approval on Aug. 30, over the original attorneys’ objections that the case, Cooper v. Aetna Health Inc., was secretly settled out from under them.

The suit is one of several by Aetna patients and providers consolidated as In re Aetna UCR Litigation.

The plaintiffs say Aetna used an outdated database in paying out-of-network providers, leading to deficient payments. The database was licensed from UnitedHealth Group subsidiary Ingenix, and those companies were also sued.

The plaintiffs allege “a secret and illegal agreement by Aetna, UnitedHealth Group, Ingenix, and most of the country’s largest health insurers to systemically under-reimburse consumers” in violation of ERISA, RICO and the Sherman Act.

The proposed settlement, covering only claims against Aetna, would set up three funds.

A $60 million fund would first pay legal fees as high as $20 million and up to $3 million in expenses. The rest could be used to pay up to $40 a year per class member, subject to a pro rata reduction, with no supporting documentation needed.

Two other funds $40 million for a patient class for services since 2001 and $20 million for a provider class dating back to 2003 would require documentation.

Ultimately, any monies not spent would revert to Aetna.

Hayden conditionally certified patient and provider classes for settlement purposes and gave her initial approval. She found the settlement was reasonable and resulted from good-faith negotiations aided by the late Nicholas Politan, a retired federal judge.

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