Physicians Earn More Than $2 Billion From RICO Settlement

Physicians Reap More Thank 2 Billion Dollars In Benefits From the MDL Settlement Agreements and Their Enforcement

Physicians have received more than 2 billion dollars in benefits from the settlement agreements reached with Aetna, CIGNA, Health Net, Humana, Anthem/WellPoint, and many Blue Cross and Blue Shield Plans as a result of class action lawsuits brought against these insurers by 19 state and county medical associations and physician representatives.  For most physicians, the greatest benefit came from the business changes that these insurers were required to implement under the settlement agreements, such as paying claims promptly, separately recognizing and paying for modifiers 25 and 59, notifying physicians 90 days in advance of any material adverse changes and limiting the timeframe in which insurers could seek recovery of alleged overpayments.  At the time the settlements were approved by the court, these business changes were estimated to be worth $2 billion to physicians.  Because Aetna, CIGNA, Health Net and Humana have committed to retain many of the business changes after the termination of their settlement agreements, this value will only continue to increase over time.

In addition, hundreds of physicians and several signatory medical societies have filed compliance disputes to ensure that insurers hold to their agreements.  Since the inception of the compliance process in 2004, compliance disputes have benefited physicians by approximately $25 million.  The compliance process is overseen by the Physicians Advocacy Institute, Inc. (“PAI”), which was founded in part to enforce the settlement agreements.  PAI’s Board is comprised of the CEO’s of many of the state and county medical associations which filed the initial lawsuits.  

Examples from major compliance dispute categories include:  

  • Physicians have received over $8.4 million from reprocessing claims with add-on CPT® codes, such as those used to report CAD mammography and myocardial perfusion.    
  • Physicians have received over $6.9 million from reprocessing claims with modifiers 25, 57, and 59. 
  • Physicians have saved over $8.5 million when compliance disputes have precluded insurers from seeking recovery of alleged overpayments beyond the timeframes allowed by the settlement agreements and state law. 
  • Physicians have received over $175,000 as a result of compliance disputes showing that EOB’s sent to patients of non-PAR physicians did not accurately disclose the amounts that physicians could bill the patients.  

Many other compliance disputes have directly benefited physicians, but in ways that cannot be quantified.  For example, physicians have filed compliance disputes enforcing their rights to opt out of certain products, to receive fee schedule changes at least 90 days in advance, to be credentialed promptly, and to have contracts compliant with the settlement agreement terms.  Because the settlement agreements allow for relief for all affected physicians when a compliance dispute raises systemic issues, hundreds of thousands of physicians have benefited from the enforcement of the settlement agreements through the compliance process.  

The lawsuits and settlement agreements served to change the landscape in physicians’ business relationships with insurers.  For example, the insurers have ceased automatically downcoding E&M codes, have generally made their fee schedules available to physicians, have ceased enforcing gag clauses in their physician contracts, and have speeded payment of clean claims.  PAI recognizes that problems persist and that new issues with insurers arise.  Therefore, PAI is also dedicated to identifying and addressing these issues in real time, freeing physicians to concentrate on patient care.    


Last Updated On

May 07, 2012

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