Anthem/WellPoint Settlement Overview

(Agreement Dated July 11, 2005; Preliminarily Approved by Judge Moreno, July 14, 2005)  

The following is a general overview of the major provisions of the Anthem/WellPoint Settlement likely to be of interest to physicians.  It is not intended to be comprehensive.  The prospective relief noted below generally extends for four (4) years from the date Judge Moreno preliminarily approves it, with specific aspects commencing as specified in the Agreement.  ( See below for specific dates .) Physicians interested in the specifics should read the language of the actual Settlement Agreement which is posted at  www.hmosettlements.com .

Retrospective Relief:

• $135,000,000 to class members, without any requirement for the submission of medical records.  (§8)
• $5,000,000 to a Foundation devoted to improving medical practice.  (§8)
• The deadline for filing claims is November 17, 2005.

Prospective Relief: Over $250 million

• Better Medical Necessity Definition - Patients will be entitled to receive medically necessary care as determined by a physician exercising clinically prudent judgment in accordance with generally accepted standards of medical practice, and cheaper alternatives are permissible only when they are "at least as likely to produce equivalent therapeutic or diagnostic results."  (§7.16)
• Payment of Vaccines and Vaccine Administration - Recommended vaccines and injectibles and the administration of such vaccines and injectibles, will be reimbursed.  (§7.14)
• Reduced Downcoding - Evaluation and management CPT codes will not be automatically downcoded or reassigned.  (§7.19)
• Fewer Contract Changes - No material adverse change to a contract may be made on less than 90 days written notice.  (§7.6)
• Fairer Payment Rules - CPT coding edits will comply with most of the guidelines contained in the AMA CPT Manual.  (§7.20)
• Consistency and Disclosure of Payment Rules - Payment rules will generally be consistent across all Blue Cross products except Medicaid, Families, S-CHIP, MRMIB and FEHBP.  Moreover, most reimbursement edits and claims adjudication logic will be disclosed.  (§7.8)
• Capitation from Date of Enrollment - Capitation fees will be paid when the patient chooses a PCP or is assigned to a PCP, retroactive to date of enrollment.  (§7.28)
• All products clauses limited - WellPoint will not require physicians to participate in products they do not want to participate in its Medicare Advantage or Medicaid networks in order to participate in its Prudent Buyer Network. WellPoint also agrees that it will not require physicians who otherwise do not provide Worker's Compensation services to provide those services as a condition of participation in the Prudent Buyer Network. (7.13)
• Stop-loss Insurance May be Purchased Elsewhere - WellPoint will not restrict physicians from purchasing stop-loss coverage from other insurers.  (§7.29)
• Faster Credentialing - New physician group members will be credentialed within 90 days of application, which physician groups can submit prior to their employment, and little or no additional credentialing will be required when already credentialed physicians change employment or location.  (§7.13)
• Arbitration Reform - Arbitration fees will be refunded to those physicians who prevail. Moreover, Well point's participation contracts will not (1) require that arbitrations take place more than 50 miles from the physicians' office, (2) require that there be multiple arbitrators, (3) prevent the recovery of any statutory or otherwise legally available damages or other relief, (4) restrict the statutory or otherwise legally available scope or standard of review, (5) completely prohibit discovery, or (6) shorten the statute of limitations.   (§7.29)
• Prompt, external dispute resolution mechanism for physician disputes - A streamlined, external review system will be established enabling physicians to dispute Well point's decisions on billing or medical records requests (Billing Dispute External Review Board). ( §7.10)
• Gag clauses prohibited - - "Gag" clauses will be prohibited.  (§7.29)
• Non-participating physicians protected - Disparaging language will be removed from EOBs, and the Agreement will not change or alter the rights of non-participating physicians to balance bill patients or to avoid dealing with WellPoint. (§§7.21 and 7.29)  Moreover, WellPoint will disclose "the general methodology, including the percentile of the included charge data on which the maximum allowable amount is based, and source data used by Company to determine the usual, reasonable and customary amount for the service or supply" whenever any specific determination is challenged.  (§7.14)
• No HIPAA Mandate - Non-participating physicians will not be forced to use electronic transactions or otherwise become HIPAA compliant, and WellPoint agrees to continue to accept paper claims.  (§7.17)
• H IPAA Compliance - For those physicians who want to take advantage of the enormous potential savings made possible by electronic transactions, including electronic remittance advice and verification of eligibility, WellPoint agrees, at the physician's election, to make those transactions available. (§7.2)
• Restrictive Endorsements Limited - When the check is a partial payment of allowable charges, physicians may cash a check with "Payment in Full" on it without waiving the right to pursue a remedy under the Settlement.  (§7.29)
• Better Mental Health Coverage - WellPoint will generally apply the §7.16 definition of medical necessity described above to mental health care, including treatment for psychiatric illness and substance abuse, it will treat its participating psychiatrists like its other participating physicians with respect to its provider directories and referrals, and it will adhere to the "prudent lay person standard" for emergency services, including admission, or physical or chemical restraints.  (§7.33)
• Better state and federal law supercedes the Agreement .  (§7.29)

Enforcement of Settlement Agreement

• A Physicians' Advisory Committee will be created to address issues of regional or nationwide scope.  (§7.9)
• Physicians and signatory medical societies will enforce the Agreement, including Well point's agreement to abide by those laws that are more protective of physicians than the provisions otherwise contained in the Agreement, exclusively through an efficient "compliance dispute" resolution process.  The United States District Court Judge handling the litigation will have ultimate enforcement power.  (§12)
• Physicians and signatory medical societies retain the right to seek the enactment of better state laws and regulations, and to enforce those better protections.  (§13.10)

Coverage:

• The Settlement covers all physicians (over 700,000 physicians, physician groups and physician organizations) who have provided covered services to any person enrolled in or covered by a plan offered or administered by any of the defendants named in the complaint (including Aetna, CIGNA, Prudential, Humana, HealthNet, Pacificare, WellPoint, Anthem, United and Coventry). 
• The Settlement also includes the following 11 Signatory Medical Societies: California, Connecticut, El Paso County (Co), Florida, Georgia, Louisiana, Northern Virginia, Rhode Island, South Carolina, Texas and Puerto Rico.

Distribution of Monetary Relief

• Retired Physicians who file valid claims will receive their pro rata share of the Retired Physician Amount, which will he calculated based on the number of retired physicians who file valid proofs of claim (they receive more than Active Physicians because they will not directly benefit from the prospective relief).
• Active Physicians will be entitled to receive the portion of the Settlement Fund that is available after subtracting the Retired Physician Amount.
• Each Active Physician who files a valid Proof of Claim will receive an amount based on the physician's gross receipts for providing covered services to WellPoint Members during a three-year calendar period between January 1, 1996 and December 31, 2004, depending on whether those receipts were less than $5,000 (entitling the physician to a single base amount) at least $5,000 but less than $50,000 (entitling the physician to five times the base amount), or $50,000 or greater (entitling the physician to ten times the base amount), regardless of whether these amounts were paid by WellPoint or one of its delegated entities.  The calculations will be based on Well point's records for the period 2002-2004, unless the Physician wishes to submit his or her own proof of payment.  Physicians who received payment for services to WellPoint members from an IPA or other delegated entity or who had larger gross receipts in an earlier three-year period should elect this option, and submit 1099s or other documentation reflecting payments from those organizations, supplemented with a letter certifying what percentage of that payment was from WellPoint and/or its subsidiaries.
• Physicians who do not specify a category of gross receipts will be deemed entitled to a single base amount. 
• Each Physician has the option of receiving payments or directing his or her amount to his/her signatory medical society foundation, or the Foundation created initially by the CIGNA Settlement, the Physicians' Foundation for Health Systems Innovations, Inc.
• Physician Groups may submit claims on behalf of Physicians employed or otherwise working with them at the time the claims are submitted, but only to the extent these Physicians do not submit individual claims. Physician Groups should file the claim form using the group's tax ID number and address, and attach a list of the names and Social Security Numbers of the individual physicians on whose behalf the group is claiming, and the category of gross receipts applicable to each physician, as discussed above.
• It is suggested that Physicians send their claim forms via certified mail so they have proof their documents were sent out before the deadline.

Start Dates of Anthem/WellPoint's Obligations Under Section 7 of the Agreement