HMO Settlements

Having had to resort to litigation in an attempt to assert some influence in their dealings with insurers, physicians around the country sought relief through a number of lawsuits alleging that companies exploit their powerful market positions to engage in fraud, extortion and racketeering. These lawsuits were consolidated into one federal case, the In re Managed Care Litigation, which applied to the nation’s 900,000 physicians and certified it as a class action in 2002.

Waging class action lawsuits against large and powerful managed care companies was once viewed by some in the medical community as a costly and futile way to redress the high-handed power tactics of these companies, and still should only be used as a last resort. But in this case, the class action lawsuit strategy did work, in that these companies’ unfair business practices were exposed. Such unfair business practices included systemic attempts to cheat doctors, control medical decisions through non-payment, and manipulate the amount and kind of necessary care provided. So, the physicians used their collective power to force changes in these practices - but it had to be through class action litigation.

Just think how much more effective the insurer/physician relationship could be if physicians were allowed to bargain collectively to begin with, so we wouldn’t have to go through these long and expensive ordeals. We end up at the federal courthouse only after years of trying to resolve physicians’ concerns with health plans through endless discussions on a individual basis, which can be easily dismissed by the “we don’t need you” attitude of the health plans.

We will continue to fight for physicians’ collective rights as a standard required in any type of provider contracting in order to avoid lengthy, complex and time-consuming litigation (most of the health plans in the In re Managed Care Litigation case settled not because they admitted to wrong doing but to avoid “lengthy, complex and time-consuming litigation”).

The In re Managed Care Litigation resulted in MultiDistrict Litigation (“MDL”) settlements, sometimes referred to as the “RICO settlements,” and they were ultimately reached with Aetna, Anthem/Wellpoint, CIGNA, Health Net, Humana, Prudential, and the Blue Cross/Blue Shield Association. You and your practice should fully understand not only your existing and new payer contracts, but also the terms of each of these settlements so that you do not inadvertently sign away rights you may have through MDL settlement provisions.

You must also realize that you may have to make some improvements in your own practice in order to get the advantages of the MDL settlement provisions, such as getting paid faster. For example, if you are still submitting paper claims, you will not get the advantage you would have if you file electronically.

Components of the MDL Settlements

Although by now the Aetna and CIGNA settlements have expired, these companies have voluntarily agreed to continue complying with many of the settlement terms. The other settlements remain in effect. The settlements generally contain three components:

·	Retroactive relief in the form of payments to physicians and physician-controlled foundations;

·	Prospective relief in the form of significant changes to the health plans’ business practices; and

·	Compliance provisions to assure that the health plans comply with the business practices provisions of the settlements.

The changes in the business practices are by far the most valuable component of the Settlement Agreements, bringing over $1.3 billion in value to America’s physicians.

Be Vigilant!

In order to be sure all these managed care giants live up to the promises made in their settlements, you must be vigilant about it.

To assist you and your practice in ensuring that these settlements are enforced properly, we have found a “Managed Care Litigation (RICO) Settlement Compliance Enforcement Toolkit” that is available, for free, on the HMO Settlements Website. It was designed to provide physicians and their office staffs with the information they need to determine whether a health plan is complying with the business practices provisions of its settlement and the tools they need to file a compliance dispute when a health plan is out of compliance.

We provide ways to link to this “Toolkit” throughout this page and you are encouraged to review each health plans’ settlement terms and compare them to your current payer contracts. If you need assistance, please contact our Compliance Officer, Lynda Odenkirk, at lyndafpd@aol.com.