TMA's Legal Action Against Health Care Payment Plans

    UPDATE: RICO Suits Bring Physicians More Than $2 Billion

    Physicians have received more than $2 billion in benefits from national settlement agreements reached with Aetna, Cigna, Health Net, Humana, Anthem/WellPoint, and many Blue Cross and Blue Shield plans in class action lawsuits that 19 state and county medical associations and physician representatives brought against these insurers. TMA was an active plaintiff in many of these suits. The greatest benefit for most physicians came from the business changes the settlements required these insurers to implement. These included paying claims promptly, recognizing and paying for modifiers 25 and 59, notifying physicians 90 days before any material adverse contract changes, and limiting the time in which insurers could recover alleged overpayments. TMA actively monitors the insurers’ compliance with these requirements.

    Overview

    With more than 900,000 physicians represented by medical groups, including state and county medical societies, the lawsuit filed under Racketeer Influenced and Corrupt Organization Act (RICO) against for-profit health plans is the largest class-action health care lawsuit filed in the United States. The lawsuit actually is a consolidated series of suits that began in Alabama in 1999, when a physician sued Humana, CIGNA, and several other HMOs. The doctor alleged that health insurers used fraudulent marketing tactics and financial incentives to restrict patient care, thereby breaching their obligations under federal law to provide necessary medical care. Within a year, a score of other suits making similar allegations were filed on behalf of patients and physicians.

    In March, 2001, TMA entered the lawsuit by filing claims against CIGNA and Humana, two of the largest for-profit health plans in Texas. TMA joined the California Medical Association, the Medical Association of Georgia, the Denton County Medical Society, and 20 individual physician plaintiffs who had filed federal lawsuits across the country against other for-profit plans. After all lawsuits were consolidated under a single federal judge in Miami, Aetna was the first of the HMOs to settle. Since then, CIGNA, Health Net, Prudential, WellPoint [Unicare], and Humana have also settled. Claims against UnitedHealth Group Inc. and Coventry Health Care Inc, the final defendants in the RICO lawsuit, were dismissed by U.S. District Judge Federico A. Moreno in Miami. An appeal is pending.

    Read the Compliance Dispute Resolution report (PDF) produced by Deborah Wineguard summarizing the compliance actions against Aetna and CIGNA. TMA has also prepared the latest report of the RICO settlement at-a-glance.

    In a separate action, a settlement has been reached with BlueCross BlueShield of Texas and 90 percent of the Blue Cross Blue Shield plans across the country.

    For information go to the HMO Settlements Web site, www.hmosettlements.com. This site serves as a source for information about the settlements reached between representatives of over 900,000 physicians, state and county medical societies with Aetna, Blue Cross Blue Shield, CIGNA, Health Net Inc., Prudential Insurance Company of America, Anthem Inc./WellPoint, and Humana Inc.


    Specific HMO Settlement Information 

    Blue Cross and Blue Shield 

    CIGNA 

    Aetna Settlement  

    Humana 

      WellPoint/Anthem Settlement (Blue Cross of California) 

    Physicians' Foundations 

    The Physicians’ Foundations were established as the result of a settlement entered into by representatives and certain medical societies with Aetna and CIGNA in the In re Managed Care Litigation. For more information go to www.physiciansfoundation.org.

    Links to Additional Resources 

     

     

     

     

     

     

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