As always, I welcome your constructive comments and suggestions about the material on this website and how we can all be most effective in co-creating the kind of healthcare system we all want.
Insurance companies have consistently underpaid physicians over the last decade. After trying to find cooperative ways to resolve the problem, a class-action lawsuits on behalf of physicians has begun to produce some results, but much more is needed. While it is unfortunate that physicians had to resort to lawsuits to be treated fairly, we hope these outcomes will motivate other health plans to be more ethical and fair in their relationships with physicians and patients.
Below are summaries of just a few of the news briefs at MedicoUnlimited, a health consulting firm. Click on their section of healthcare news. You can also find on that site news on the actions taken against physician groups trying to negotiate fairer contracts with health insurance plans. The cases, in my view, illustrate how physician's hands are tied in their attempts to negotiate in a non-adversarial way.
What do these lawsuits mean for patients and physicians?
It means that physicians have a legitimate complaint that is leading to courts finding for their claim or insurance companies settling.
It also means that physicians are restricted in ways to gain fair relationship with insurance companies in non-adversarial ways.
It illustrates that physicians are routinely punished and restricted for attempting to negotiate fair contracts.
While these are steps in the right direction, my guess is that insurance companies will use these and the push to be fair in their relationship with physicians as a justification for premium rate increases for patients. Don't buy it. Premiums have continued to increase, while physician rates have declined. Physician payment is not the cause of rate increase in our insurance. (We will have another article on what some of the causes are and more recommendations for action.)
A class action suit was filed in 1999 against 6 of the nation's largest health insurers for violations of the Racketeering Influenced and Corrupt Organizations Act (RCO) for their payment methods to physicians and is just now in 2004 at the point of resolution.
Health plans named in the suit are:
Aetna, Anthem, Humana, Cigna, PacificCare Health Systems, UnitedHealth Group, and WellPoint Health Networks.
May, 2003 (Modern Healthcare) Aetna agreed to pay $470 million dollars in a class action suit filed by physicians in 1999. The suit, representing 700,000 physicians, and filed my medical associations in Texas and California, claimed that Aetna was systematically reducing payments and interfering in patient care. As part of the settlement, Aetna is required to:
* pay $100 million to physicians
* establish a $20 million dollar charitable foundation to find ways to improve medical care
* pay approximately $50 million in attorneys' fees
* establish an advisory panel that includes doctors to work on pyament issues
* change billing methods
Aetna also agreed to pay $4 million dollars to 147,000 dentists, plus another $1 million to the American Dental Association's charitable foundation because of routinely delaying or reducing payments for dental claims. In addition, Aetna promised to:
* clarify the details of its claims process
* reduce paperwork and increase computerization
Aetna paid $75 million in attorney fees during the second quarter of 2003.
Additional note on Aetna:
In October 2004, Aetna and Cigna both are included as defendants in a suit that alleges a scheme to fraudulently market, sell and administer insurance products through employee benefit plans and to steer business to a broker in exchange for kickbacks.
Cigna settled their part in the lawsuit after an initial offer the year before was rejected. They agreed to pay $85 million.
In separate cases:
Blue Cross Blue Shield:
The Connecticut Medical Society included Blue Cross and blue Shield Association and its member plans in a class action suit for depriving physicians of millions of dollars due them. The suit alleged that BCBS forced physicians into unfavorable contracts, used computer programs to routinely deny or delay payments and interfered in patient care. Although they and the other defendants who had not settled tried to get the case appealed in regard to its class-action status, the court ruled against them.
Humana has agreed to pay 1,900 physicians in 3 states in the Cincinnati area $100 million over 3 years ($20 million, $15 million and $10 million) as a result of a case filed agains four health insurers. It will be a 30% increase in some of their reimbursement rates. The suit claimed that Humana had conspired for years to use illegal and anti-competitive practices to supress reimbursements to physicians. After the 3 years, a committee will oversee Humana's talks with physicians to make sure that there are not anti-competitive activities. Humana also will pay $6 million in attorney fees.