Law Feature - July 2010
Tex Med. 2010;106(7):43-47.
By Crystal Conde
The countdown has begun for physicians to take action in the settlement of a lawsuit against UnitedHealthcare over its system for determining "usual, customary, and reasonable" (UCR) charges for out-of-network services. About $300 million is available to physicians who want to file a claim, but they must submit a claim form and any required documentation by Oct. 5.
In 2000, the American Medical Association, in conjunction with the Medical Society of the State of New York and the Missouri State Medical Association, filed the lawsuit against United, alleging United and other health insurers used a price-fixing scheme to underpay physicians and patients for out-of-network care.
Evidence of United's improper business practices gathered in the course of the litigation caught the attention of New York Attorney General Andrew Cuomo, who launched a separate investigation.
In early January 2009, United reached a settlement with the New York attorney general's office in which it agreed to shut down the Ingenix database and to make certain business practice changes. Days later, United agreed to pay about $300 million to fund the settlement of AMA's lawsuit seeking additional reimbursement on behalf of health plan members and out-of-network physicians who may have been underpaid due to use of the Ingenix database.
"The AMA's persistent efforts have earned significant results for physicians that extend far beyond the recovery of damages," said then-AMA President Jim Rohack, MD. "Every physician and patient will benefit from the stand the AMA took against UnitedHealth."
Susan Strate, MD, chair of the TEXPAC Board of Directors and former chair of Texas Medical Association's Council on Socioeconomics, says insurance companies' use of the Ingenix database resulted in increased profits at the expense of patients and physicians.
"From 1994 to 2009, while doctors were filing out-of-network claims, they were being paid based on a flawed database that was subject to manipulation by the insurance companies that controlled it," she said. "Physicians obviously suffered because they were underpaid, and patients also suffered because they had to pay more out of pocket than they might otherwise have."
The claims administrator, Berdon Claims Administration, mailed a notice of proposed settlement and claim form to physicians on April 16. Physicians who think they are class members but didn't receive the documents may download them online. (See "United Settlement FAQs.")
Physicians qualify as members of the settlement class and are eligible for a payment if they furnished covered out-of-network services or supplies to a subscriber at any time from March 15, 1994, through Nov. 18, 2009.
In addition, to qualify as a class member, physicians must have had a claim for payment processed or reimbursed by a defendant using the Ingenix databases or one of the following out-of-network payment policies: anesthesia, assistant surgeon, co-surgeon/team surgeon, multiple procedure, preventive medicine, professional/technical, and reduced services.
Defendants in the settlement are United HealthCare Corporation (now known as UnitedHealth Group); Ingenix, Inc.; Metropolitan Life Insurance Company; American Airlines, Inc.; and their subsidiaries and affiliates. (See "UHC Subsidiaries and Affiliates.")
July 27 is the deadline for physicians to file an objection to the settlement or opt out. Those who opt out may still pursue individual claims against United, even if the settlement is finally approved at a Sept. 13 hearing in New York federal court.
Visit the Berdon Claims Administration website to view the notice of proposed settlement, the settlement agreement, and the claim form. The documents are also available on the AMA website.
Dr. Strate plans to file a claim under the terms of the settlement with United. She encourages all physicians who provided out-of-network services during the designated time frame to do the same.
"If you don't file a claim, you don't get to participate, and you won't receive any of the funds. The plans then won't be held accountable," she said.
Help for Physicians
The notice of proposed settlement and the claim form can seem daunting to physicians running a busy practice. Luckily, many resources are available to help physicians who wish to participate in the settlement.
The AMA website features tools that provide all physicians with step-by-step guidance in determining eligibility, assembling documentation, and filing a claim under the terms of the settlement. AMA will also keep physicians updated on the latest settlement information with free practice management e-mail alerts.
The AMA Practice Management Center can help AMA members fill out their claim forms, as well. AMA members may call the center at (800) 621-8335 for help.
While Dr. Strate acknowledges the claim form and process for filing may seem intimidating, she emphasizes the importance of physician participation in the settlement.
"Some of that money that insurers took out of physicians' pockets is available for them to recoup if they file a claim. Organized medicine put a lot of work into moving the lawsuit forward. Now that it has settled, everyone who's eligible should participate. Otherwise, it's a lot of work for nothing," she said.
Physicians have four options in regard to the settlement:
- Submit a proof of claim. If a physician qualifies as a member of the settlement class, this is the only way to share in the settlement proceeds. Physicians should file a Group D claim, found on page 13 of the claim form.
- Ask to be excluded. To be excluded, a physician must submit a written request to Berdon by July 27. This option is the only one that allows a physician individually to sue the defendants over the claims resolved in the settlement. If physicians exclude themselves, they won't be able to share in the settlement proceeds.
- Object. A physician may write to the court about why he or she doesn't agree with the settlement.
- Go to a hearing. Physicians and/or their attorneys may attend the final settlement hearing on Sept. 13 in New York federal court. If physicians or their attorneys wish to speak in court about the settlement, they must notify the court by July 27 and supply any materials to be presented in court to the lead counsel for the settlement class and the defense counsel. Instructions are on page 6 of the proposed settlement notice.
Physicians who choose to do nothing won't be able to share in the settlement proceeds.
Physicians have two options for filing claims. They may file a simplified claim or seek increased damages.
A simplified claim entitles settlement class members to receive 50 percent of their recognized loss based solely on the information furnished to the claims administrator by defendants regarding the covered out-of-network services or supplies physicians provided to subscribers from Jan. 1, 2002, to May 28, 2010. Berdon defines recognized loss as the difference between what a physician billed a defendant and the amount the defendant and/or the subscriber paid.
To review the information supplied by the defendants to the claims administrator, physicians may request a copy of the report that lists the covered out-of-network services or supplies by completing and signing the authorization form on page 15 of the claim form.
The form is also available on the AMA website and on the Berdon website. The form can be returned to Berdon by:
Requesting the report and using the information it contains will make it easier to compile and submit the required documentation. Submitting the report to Berdon isn't a requirement, however.
Physicians may seek increased damages - 70 percent or 90 percent of the recognized loss - by completing a chart that details each covered out-of-network service or supply provided, as well as attaching additional documentation. The chart and instructions are on pages 13 and 14 of the claim form.
Developing a Fair System
Under the terms of the settlement with the New York attorney general's office, United agreed to contribute financially to the development of a new database to determine fair out-of-network physician reimbursement rates and to create an easily navigable website available for public use by consumers. The project, known as FAIR Health Inc., is being spearheaded by a network of research facilities that includes Syracuse University, State University of New York (SUNY) at Buffalo, Cornell University, University of Rochester, and SUNY Upstate Medical Center.
FAIR Health is in the process of consulting with state medical associations, including TMA, to collect physician input regarding the new system's methodology for calculating fair payments for out-of-network services.
"Texas physicians should know that their voices will be heard through TMA regarding development of the new database and the criteria that will be used to determine out-of-network payments," Dr. Strate said.
Under the terms of the settlement, FAIR Health will own and operate the new database and will be the sole arbiter and decision-maker on all data contribution protocols and all other methodologies used in connection with the database. The consumer website developed by FAIR Health will allow consumers to find out before receiving common out-of-network medical services how much they may be reimbursed in their geographic area.
The nonprofit also will be responsible for making rate information from the database available to health insurers and for conducting academic research with the database to help improve the health care system.
Attorney General Cuomo's investigation concluded that United's rate of underpayment to out-of-network physicians ranged from 10 percent to 28 percent. But United wasn't the only insurer under fire for use of Ingenix. Mr. Cuomo also reached settlements with Aetna Inc., CIGNA Corp., and WellPoint Inc. Each health care payment plan agreed to discontinue using Ingenix once the new database is functional and to pay into a fund to finance development of the new system.
Combined, the insurance companies will supply nearly $100 million to pay for the new reimbursement system. FAIR Health hopes to have the new database up and running later this year. The FAIR Health website will be www.fairhealthus.org.
Crystal Conde can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by e-mail at Crystal Conde.
July 27 : Deadline for filing objections to the settlement or for opting out of the settlement
Sept. 13 : Date for the final settlement hearing to consider any filed objections
Oct. 5 : Deadline for filing a claim to share in the settlement fund
UHC Subsidiaries and Affiliates
Note the following nonexclusive list of subsidiaries and affiliates of United HealthCare Corporation (UHC) or UnitedHealth Group:
- Oxford Health Plans, Inc.
- Sierra Health Services, Inc.
- PacifiCare Health Systems, Inc.
- Mid-Atlantic Medical Services, Inc. (MAMSI)
- Golden Rule Insurance Company
- HealthPartners of Arizona, Inc.
- PHP, Inc.
- GenCare Health Systems, Inc.
- Student Resources (former student insurance division of MEGA Life and Health Insurance Co.)
- Fidelity Insurance Group
- Touchpoint Health Plan, Inc.
- Neighborhood Health Partnership, Inc.
- Definity Health Corp.
- John Deere Health Care, Inc.
- IBA Health & Life Assurance Co. and IBA Self-Funded Group, Inc.
- Arnett Health Plans, Inc.
- United Medical Resources, Inc. (UMR)
- Fiserv, Inc.
Check the list of health insurance companies affiliated with United that are subject to the settlement. Physicians who treated patients covered by any of these companies should consider requesting claims information and filing claims with Berdon Claims Administration, the claims administrator.
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United Settlement FAQs
What do I need to do to take part in this class action settlement and receive a payment?
You must complete, sign, and mail the claim form and supporting documentation postmarked by Oct. 5 to UnitedHealthcare Class Action Litigation, c/o Berdon Claims Administration, PO Box 15000, Jericho, NY 11853-0001.
I believe I am a class member, but I didn't receive the settlement notice and claim form. How can I obtain these documents?
These documents are available in PDF format on the websites of Berdon, the American Medical Association, and UnitedHealth Group.
I am part of a medical group. Do I have to file a claim individually?
Medical groups and independent practice associations (IPAs) can file on behalf of their members and may do so without notifying the individual members. Check with your group to see whether it has filed on your behalf. If the group has not filed, you may file a claim on your own behalf. You may also file a separate claim for any time during the class period that you were not part of the medical group.
How much money am I likely to receive from this class action?
The claims administrator will determine your proportionate share of the net settlement fund based on the type of claim you file and other relevant information, in accordance with the plan of allocation. The plan of allocation is a set of formulas that determines each claimant's proportionate share of the settlement proceeds. It's not possible to estimate your potential payment until all claims have been reviewed and evaluated.
Sources: American Medical Association and Berdon Claims Administration.
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