Class-Action Lawsuits
How Can the Class-Action Lawsuits Help Your Practice?
See Slide-show | PDF version] [October 19, 2005]
Key Provisions of Class-Action Lawsuit Settlements Agreements Against Healthcare Insurers [click here]
Horizon Has Agreed to Settlement of Class-Action Lawsuit
On April 27, 2007, counsel representing a putative class of approximately 900,000 physicians, the Medical Society of New Jersey (MSNJ), prominent state medical societies, and other medical societies across the country, announced that they had settled a national class action lawsuit pending before U.S. District Judge Federico Moreno in federal court for the Southern District of Florida in Miami. The class action, Love et al. v. Blue Cross Blue Shield Association, et al., named numerous Blue Cross and Blue Shield plans, including Horizon Blue Cross Blue Shield of New Jersey, as co-conspirators in a massive scheme to defraud doctors in violation of the federal Racketeer Influenced and Corrupt Organization Act (RICO). When combined with settlements with other Blues, this settlement means that more than 90% of all Blue Cross and Blue Shield Plans in the country have now settled this class action with physicians. The latest settlement represents another major development in the ongoing battle against widespread and chronic abuses perpetrated against physicians by health insurers. Physicians and medical societies have also previously settled very similar claims against almost every other managed care insurer in the nation in prior class-action lawsuits, resulting in significant reforms in the health insurance landscape in this country.
The settlement consideration includes a guaranteed cash payment of over $128 million to class members. In addition, the settling defendants have agreed to implement important business practice changes that bring the estimated value of the entire settlement consideration to well over $1 billion. These changes include commitments to do the following:
- Implement a definition of “medical necessity” that ensures that patients are entitled to receive medically necessary care as determined by a physician exercising clinically prudent judgment in accordance with generally accepted standards of medical practice;
- Use clinical guidelines that are based on credible scientific evidence published in peer-reviewed medical literature (taking into account Physician Specialty Society recommendations, the views of physicians practicing in the relevant clinical areas, and other relevant factors) when making medical necessity determinations;
- Provide physicians with access to an independent medical necessity external review process;
- Establish an independent external review board for resolving disputes with physicians concerning many common billing disputes;
- Pay for the cost of recommended vaccines and injectibles and for the administration of such vaccines and injectibles;
- Not automatically reduce the intensity coding of evaluation and management codes billed for covered services;
- Ensure the payment of valid clean claims within fifteen (15) days for electronically-submitted claims and thirty (30) days for paper claims;
- Provide fee schedules to physicians;
- Establish a compliance dispute mechanism to address disputes regarding the Blues’ compliance with the agreement;
- Establish and/or maintain physician advisory committees; and
- Provide ninety (90) days’ notice of changes in practices and policies and annual changes to fee schedules.
These practice changes are expected to result in hundreds of millions of dollars in real savings to physician practices throughout the country. The end result will leave doctors more time for patient care instead of dealing with what was a complex, cumbersome, costly and frustrating system put in place by Blue Cross and Blue Shield plans.
The agreement follows similar settlements with virtually every other major managed care company in the nation, with the exception of United Healthcare, who continues to litigate against physicians rather than make the kinds of positive practice changes other insurers have agreed to make. Indeed, United Healthcare has repeatedly refused to address the significant concerns raised by representatives of the more than 400,000 physicians nationwide who care for United Healthcare members. According to MSNJ CEO & Executive Director, Michael T. Kornett, “United Healthcare simply has not raised its standards to what has become the industry standard in healthcare. United Healthcare has systematically engaged in practices of coercion and intimidation that are akin to the actions of a school-yard bully. When all the other major national healthcare insurers agree to conduct business with their physician/providers in a more transparent and fair manner, it is difficult to understand why United Healthcare refuses to operate on a more level playing field. It will be regrettable if MSNJ is forced to legislate business practices that the other major players in the industry have already agreed to.”
“The commitments contained in this agreement and prior agreements with over 90% of the Blues plans in the country are premised on achieving the highest quality delivery of health care, and brings the settling Blues into compliance with what has become the standard for the industry that is truly in the best interest of physicians and their patients,” said Edith Kallas, also co-lead counsel and a partner at Whatley Drake & Kallas.
The case is being heard in the United States District Court, Southern District of Florida, Miami Division: 03-21296-CIV-Moreno. Additional background information on the case can be found online at www.hmocrisis.com. That site includes a complete copy of the settlement agreement as well as the joint press release announcing the settlement.
For more information regarding HMO litigation please visit the HMO Crisis Newsroom.
Click here for the AMA’s comments on the settlement.
COMPLIANCE
Multidistrict Litigation Enforcement Tool Kit ÿ[February 8, 2006]
Sutter v. Horizon — Class Action Settlement [December 4, 2006]
This settled class-action lawsuit was a New Jersey state court case that was pending for some time. MSNJ was not a party in this action and has not been involved in its prosecution. MSNJ had no role in the settlement negotiations. ÿMSNJ is, however, investigating how this class-action settlement will affect New Jersey physicians.
As a reminder, MSNJ is an active party to a national class-action lawsuit against Horizon which is currently in court-ordered mediation in Florida. The mediation order is set to expire in mid-November. MSNJ and Horizon are engaged in good-faith settlement negotiations pursuant to the court’s mediation order. We will keep members informed of significant developments in the pending, national class-action lawsuit against Horizon.
SETTLED NATIONAL CLASS-ACTION LAWSUITS
Aetna [updated May 11, 2005]
CIGNA [updated September , 2007]
HealthNet [updated July 11, 2005]
WellPoint and Anthem [updated November 2, 2005]
AETNA
Re-submitting EKG Claims to Aetna [August 10, 2006]
Attached are Excel spreadsheet physicians should use to submit claims, the certification, and the communications piece on modifier 25.
The Aetna national class-action settlement agreement obligated Aetna to recognize add-on codes, as designated by cpt, to be eligible for separate payment and not subject to multiple procedure logic. However, Aetna’s systems did not recognize certain codes related to cad mammography services (cpt codes 76082 & 76083) and myocardial perfusion testing services (cpt codes 78478 & 78480) and, consequently, denied payment. Numerous physicians filed compliance disputes alleging violations of the Aetna settlement agreement. Aetna has since corrected its systems to recognize the cad mammography add-on codes (as of April 1, 2005) and myocardial perfusion testing add-on codes (as of May 13, 2005).
Aetna and representatives from a number of state medical societies have reached an agreement settling this add-on code dispute that is available to affected physicians. Affected physicians must take action by July 14, 2006 to be paid for these services. Aetna will process new or resubmitted claims for the following:
CAD mammography services (CPT codes 76082 & 75083) provided to Aetna members between January 1, 2004 and March 31, 2005; and
Myocardial perfusion testing services (cpt codes 78478 & 78480) provided to Aetna members between January 1, 2004 and May 12, 2005.
Physicians can resubmit previously denied claims by listing the claims on a spreadsheet and submitting them to Aetna via secure e-mail. New claims may be submitted electronically or via paper, using current standard procedures. Key information, instructions, and forms can be found on www.aetna.com on the “Doctors and Hospitals” main page under “Features” in the lower right corner. Click on the link entitled “Add-On Codes Claims Payment.” For further information, call the Aetna Provider Service Center at 888-632-3862 for Indemnity and ppo-based benefits plans or 800-624-0756 for hmo benefits plans.
On May 24, 2006, msnj representatives and the New Jersey Academy of Family Practice met with Aetna regarding the recovery of purported overpayments to physicians with captitated contracts.ÿAt the meeting we reviewed the notices Aetna was sending to the affected practices and found the notice deficient, in that the information provided to physicians was not sufficient to allow independent verification of an overpayment. We have written to Aetna Compliance Officer Tom Young [here’s the letter]. [June 8, 2006]
Aetna will be writing to physicians whom they have overpaid on claims submitted between Marcy 1, 2005, and December 31, 2005. We have copies of letters covering two circumstances.
1. Aetna inadvertently issued both capitation and fee-for-service payments that were already covered by capitation. They will deduct the amount of the overpayment from physicians’ July 2006 capitation payments.
2. Aetna inadvertently issued both capitation and fee-for-service payments that were already covered by capitation. They will deduct the amount of the overpayment from physicians’ monthly capitation payments, up to 50% of the total capitation amount per month.[May 11, 2006]
Policy Addendum
In October 2005 Aetna sent a letter to physicians that “outlines, reinforces and clarifies selected provisions” of the 2003 Physician Settlement Agreement. [November 28, 2005]
MSNJ Reaches Agreement with Aetna in Class-Action Lawsuit
[May 22, 2003]
The claims period against Aetna has closed and many physicians are receiving checks for the monetary compensation portion of the settlement agreement. More importantly, Aetna is improving several business practices as a direct result of msnj’s continued intercession and the class-action lawsuit settlement agreement. One change, involving coding policy and reimbursement, was driven by information and advice from msnj. The other change involves Aetna’s voluntary extension of the settlement agreement for an additional year.
First, Aetna will pay for the following codes with dates of service beginning April 1, 2005:
76082: Diagnostic Mammography; and
76083: Screening Mammography; and
77336: Radiation Physics Consult.
Also effective with an April 1 date of service, Aetna will allow payment of the ophthalmic imaging code, 92135, for glaucoma and retinal diseases (but not routine screening of the general population).
Effective June 15, 2005, Aetna will allow separate reimbursement of the following codes:
76872/76942: Rectal Ultrasound & Biopsy
78478/78480: Ejection Fraction (add-ons).
Second, Aetna has stated “because it is consistent with our mutual goals, we have agreed to extend the substantive provisions of the settlement agreement for an additional year, to June 2, 2009.” Read about the coding policy and extension of the settlement agreement in a letter dated April 4, 2005, to S. Manzoor Abidi, md, President, msnj, from Joseph F. Dougherty, md, Aetna, Medical Director. Msnj is pleased to convey this agreement to our members.
CIGNA
The CIGNA class-action settlement agreement terminated on September 4,2007.
That means that the terms of the agreement are no longer enforceable through the compliance mechanism. However, CIGNA has agreed to honor certain provisions of the settlement agreement. To understand the impact of the termination of the agreement, read a document prepared by the Physician Advocacy Institute (PAI).
http://www.hmoscttlcmcnts.comfsettlements/cigna/CIGNA_SETTLEMENT_AGREEMENT_ENDS.pdf. To help you evaluate your contract with CIGNA, read a document prepared by the American Medical Association (AMA) http://www.hmosettlcments.comfsettlements/cigna/AMA-Review_CIGNA_contracts.pdf.
HEALTHNET
MSNJ and the other signatory medical societies prosecuting the national class-action lawsuit against HealthNet have reached a settlement agreement. This is the third of six national class- actions against major healthcare insurers to reach settlement. The agreement must be approved by the U.S. Federal District Court in Florida. The hearing is set for September 19, 2005. If approved, the settlement agreement will cover approximately 900,000 physicians. Class members who wish to opt-out of the settlement agreement must do so by August 22, 2005.
The agreement requires significant reforms to HealthNet’s business practices with physicians. The agreement requires the application of generally accepted medical standards, along with greater transparency, and enforcement mechanisms to ensure compliance with settlement terms. With less administrative complexity, medical practices may be able to reduce overhead and place greater focus on patient care.
The settlement value is estimated to exceed $125 million. Of this amount, $39 million will be placed in a fund to be distributed among class members under a pro rata share formula. It is estimated that HealthNet will have to spend approximately $87 million to implement the changes in business practices required by the settlement. Importantly, the cost of HealthNet’s compliance with the terms of the settlement has been shifted to HealthNet by requiring it to place $1 million in a compliance fund.
Class members should have received a notice letter in the mail that outlines the procedure to receive a share of the $39 million settlement fund without any requirement to submit documentation or medical records. A simple claim form must be filed by September 21, 2005. The amount of distribution is based on gross receipts for the calendar years 2002, 2003, and 2004. If gross receipts are less than $5,000 for these three years combined then the class member will receive a single base amount. If gross receipts are at least $5,000 but less than $50,000 class members will receive five times the base amount. If gross receipts are $50,000 or greater class members will receive ten times the base amount. There is an alternative method to calculate if a class member wishes to use three consecutive years beginning in 1996. However, documentation will be required if alternative years are selected. There is also a method for retired physicians to recover.
For details on the terms of the agreement, read MSNJ’s Member Update. [May 4, 2005]
Wellpoint & Anthem
Press Release from www.hmosettlements.com
WellPoint and counsel for approximately 900,000 physicians announced that they settled two national class-action lawsuits and various state court actions on July 11, 2005. The WellPoint settlement is the fourth against defendants in the managed care litigation pending in Florida. The agreement settles the national class-action lawsuits against both WellPoint and the pre-merged company Anthem.
MSNJ was a signatory to the national class-action lawsuit. Msnj participated to vindicate the rights of its members with respect to the fraud allegations. The lawsuits against WellPoint and Anthem included allegations of conspiracy and fraud among the other national class-action defendants under the Racketeer-Influenced and Corrupt Organizations (rico) laws. As such, physicians who were participants in the plans of any of the defendants in these lawsuits and who rendered services to any of them between August 4, 1990, and July 15, 2005, may file a claim for relief under the WellPoint settlement. The defendants include:
Aetna, Inc.; Aetna USHC, Inc.; Anthem, Inc. (now known as WellPoint, Inc.); CIGNA; Coventry Health Care, Inc.; WellPoint Health Networks Inc.; Humana Health Plan, Inc.; Humana Inc.; PacifiCare Health Systems, Inc.; Prudential Insurance Company of America; United Health Care; United Health Group; Blue Cross of California; Rocky Mountain Hospital and Medical Service, Inc.; Anthem Blue Cross and Blue Shield of Colorado; Community Insurance Company; Anthem Health Plans, Inc.; Anthem Insurance Companies, Inc.; Blue Cross and Blue Shield of Georgia, Inc.; Anthem Health Plans of Kentucky, Inc.; Anthem Health Plans of Maine, Inc.; RightCHOICE Managed Care, Inc. (d/b/a Blue Cross and Blue Shield of Missouri); Anthem Health Plans of New Hampshire, Inc.; Anthem Health Plans of Virginia, Inc.; Blue Cross Blue Shield of Wisconsin; the Blue Cross and Blue Shield Association (“BCBSA”) and various licensees of the BCBSA (collectively the “Defendants”).
Web Site Links
www.hmosettlements.com (Aetna, Cigna, HealthNet, Prudential)
www.npmlaw.com (HealthNet settlement facilitation’s web site)