A recent Law 360 story by Bonnie Eslinger, “Attys Get $4.3M in Fees in $17M HIV Disclosure Settlement” reports that a Pennsylvania federal judge has granted final approval to Aetna Inc.’s $17 million deal to settle claims the managed health care giant wrongly disclosed patients’ HIV-related information and also awarded more than $4.3 million in fees and cost reimbursements for the patients’ attorneys.  U.S. District Judge Juan R. Sanchez issued the decisions in the putative consolidated class actions in two orders.

“The settlement agreement is fair, reasonable, adequate and in the best interests of plaintiffs and the settlement class in light of the complexity, expense and duration of litigation, as well as the risk involved in establishing liability and damages and in maintaining the class action through trial and appeals,” the judge wrote in the order giving final approval to the settlement.  Similarly, the judge called a 25 percent cut of the settlement for attorneys’ fees “fair and reasonable,” along with a $73,892 reimbursement for class counsel's out-of-pocket costs.

The court also approved financial awards of $5,000 each to the seven plaintiffs who filed the complaints that were consolidated in the litigation, and $2,000 each to 30 additional class representatives whose claims were included in an amended complaint filed in December.  Each plaintiff remains anonymous under the use of Jane or John Doe, initials or other pseudonyms.  The lead plaintiff in the first-filed Pennsylvania action went by the pseudonym of Andrew Beckett, the name of the fictional lawyer with HIV portrayed by Tom Hanks in the 1993 movie "Philadelphia.”

The settlement, announced in January, stems from a July mailing telling Aetna policyholders who take HIV medications and pre-exposure prophylaxis — or PrEP, an HIV preventative regimen — how to fill their prescriptions.  The letters, which were mailed as part of a settlement in earlier litigation that accused Aetna of jeopardizing policyholders' privacy by requiring them to obtain HIV medication through the mail rather than in stores, were sent in envelopes with large clear plastic windows on the front, through which members' names, addresses, claim numbers and instructions related to HIV medication were visible, according to the plaintiffs.

Six separate suits were filed in Pennsylvania, California and Connecticut claiming policyholders named in the mailings suffered emotional distress and damage as a result of Aetna's failure to properly secure and keep private their confidential HIV-related information.  The plaintiffs claim that Aetna improperly transmitted 13,487 customer names to the company's legal counsel, Gibson Dunn LLP, and settlement administrator to facilitate notices that the insurer had to send out as part of the earlier settlement, and that large transparent window envelopes revealing that information were sent to 11,875 of those individuals.

The settlement requires the insurer to pay $17.1 million into a nonreversionary cash settlement fund that "will provide substantial and meaningful — and immediate — benefits for the settlement class," according to a brief in support of the plaintiffs' motion for preliminary approval of the pact.  Specifically, the deal provides that all class members will automatically receive a base pay of either $75, for those who had their information disclosed to Gibson Dunn and the settlement administrator in advance of the mailings, or $500 for those who had their information exposed through the mailing.

In addition, settlement class members whose privacy was breached by the window envelopes have the opportunity to seek additional monetary relief of up to $20,000 through the filing of a claim form documenting financial or nonfinancial harm, and the insurer is required to implement "significant policy and procedure changes with respect to how [it] handles [protected health information] in litigation that are intended to ensure that what is alleged to have occurred in this action never happens again," according to the agreement.

The policy changes include developing and implementing a "best practices" policy for using protected health information in litigation, communicating that policy to in-house and outside counsel in all existing and new litigation, ensuring that in-house counsel are trained on the policy and the insurer's requirements under federal and state health privacy laws, and conducting an audit of all outside counsel to ensure they have the proper procedures in place.

The case is Beckett v. Aetna Inc. et al., case number 2:17-cv-03864, in the U.S. District Court for the Eastern District of Pennsylvania.