Aetna ( AET) and representatives of more than 700,000 physicians, state and other medical societies have settled a national class-action lawsuit pending in federal court in Florida, as well as multiple state court actions filed against the company, that claimed the health insurer employed unfair reimbursement practices.

If approved by the court, the agreement would conclude a lawsuit against Aetna involving issues dating back to 1990, and was part of ongoing multidistrict litigation pending against many of the nation's largest for-profit health insurers. The agreement will be filed with the court Thursday.

The company said the agreement will improve physician-related business practices "that set new levels of transparency in paying claims," including a national advisory committee of doctors to provide advice to Aetna. The deal will also establish an independent foundation aimed at improving the quality of health care in the U.S. Aetna said the pact will streamline communication between the company and doctors, as well as reduce the complexity in the claims-payment system.

"These changes are expected to result in increased predictability and speed of claims payment, creating significant value for physicians by reducing time-consuming and costly administrative burdens, and giving them and their office staffs more time to focus on their central mission -- providing health care to patients," the company said in a press release. "Aetna also expects to be able to operate more efficiently and serve its customers and members more effectively, with lower administrative costs over time."

The value to physicians of the business-practice improvements over the course of the agreement is estimated at about $300 million. This amount represents, among other things, prompt payments, lower administrative costs for physicians due to electronic claims submissions and reduced resubmissions. Aetna said the cost of implementing these changes has already been included in its financial plans, including guidance for 2003.

Additionally, Aetna has agreed to pay $100 million to physicians and $20 million to a foundation established by the agreement, as well as up to $50 million in legal fees to be determined by the court. Aetna expects to take a charge of around $75 million in the second quarter. The charge will be recorded as an "other item" and won't affect operating earnings, the company said.