Judge OKs CLASS ACTION against health plans

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PROFESSIONAL ISSUES

http://www.ama-assn.org/sci-pubs/amnews/pick_02/prl21014.htm

Judge OKs class action against health plans

600,000 physicians are included in the massive lawsuit, but patients' suits

must go forward individually.

By Albert, AMNews staff. Oct. 14, 2002. Additional information

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If you're one of the estimated 600,000 physicians who has treated patients

insured by some of the biggest health plans over the past decade, you stand

to reap the benefits of a lawsuit working its way through the federal court

system.

The payoff could be financial. It could also mean a change in the way health

plans reimburse physicians.

U.S. District Judge Federico A. Moreno in September granted class-action

status to lawsuits filed against Aetna Inc., CIGNA Corp., Humana Inc.,

Foundation Health Systems Inc., PacifiCare Health Systems, Prudential

Insurance Co., UnitedHealthcare and Wellpoint Health Networks Inc.

" Doctors have been looking forward to seeing movement, and that is what they

are seeing right now, " said California Medical Assn. President-elect

Bangasser, MD. " This is really viewed as an important step. "

Lawsuits filed by medical associations and individual physicians from around

the country -- combined and assigned to Moreno, of the U.S. District Court,

Southern District of Florida Miami Division -- accuse the companies of

breaching contracts and defrauding physicians, in violation of the federal

Racketeer Influenced and Corrupt Organizations Act. Bundling, downcoding and

arbitrarily denying claims are a few of the methods physicians say health

plans used to reduce payments.

" Our allegations are that it is a systematic scheme and we've proven that

enough to go forward as a class action, " said Archie Lamb, co-lead counsel

representing individual doctors and medical associations in California,

Florida, Georgia, Louisiana and Texas. " The battle in this litigation is far

from over, but today is a great day for physicians and their patients. "

Lawsuits filed by individual physicians seek an unspecified amount of money

from the health plans for economic damages that physicians have incurred. The

number will become clearer as discovery, which started Sept. 30, goes

forward, Lamb said. The medical associations are not asking for money.

Instead, they want system change.

The lawsuit focuses on downcoding and bundling.

" We hope that these matters that have been driving physicians crazy for years

will have a satisfactory resolution so that physicians won't have to spend so

much time and effort chasing after being paid for services, " said P.

Wilcox, general counsel for the Texas Medical Assn. " The questions now are

how much good will come from the lawsuits and how long do we have to wait? "

Moreno ordered the two sides to agree on a mediator by Oct. 30 to discuss the

possibility of settling the case. They are slated to update the judge on any

progress toward a potential settlement in March 2003.

Even as discovery begins, however, health plans are set to appeal Moreno's

decision to certifying the physician lawsuits as a class action.

" We are confident that -- as with other trial court orders approving

gargantuan RICO classes encompassing divergent claims -- the 11th Circuit

Court of Appeals will vacate the order and hold that the physicians' claims

must be pursued individually, " said Boyle, a Washington, D.C.-based

attorney on the health plans' defense team. " Trial lawyers who represent

these physicians hope to throw every imaginable physician grievance against

every conceivable health plan into the same jury trial. The result would be a

confusing mess, fair to no one. "