Law Feature - June 2005
By Erin Prather
The first letter Poorman-Douglas sent Page Gorback said her husband's claim for reimbursement by CIGNA HealthCare was defective. So did the second. And the third. And all the ones after that.
They're still coming, and by early May, Page Gorback and her husband, Michael S. Gorback, MD, a pain specialist in the Houston suburb of Webster, faced an intimidating inch-thick stack of rejection letters.
Page Gorback and her staff had worked diligently to ensure the claims they filed as part of CIGNA's settlement of a federal antiracketeering lawsuit against the HMO industry were correct. And now, Poorman-Douglas, the settlement administrator, is telling her the claims are "defective." But the letters don't say why.
"The letters they sent me are exactly the same for every denial and do not provide claim-specific information regarding defects," Page Gorback said. "Rather than just sending me one piece of paper that states the following claims are defective with specific reasons, each generic notice was accompanied by copies of all of the documentation that I sent. I now have this huge stack to sort through and no idea where to look for why each claim was defective. This is the sort of behavior that precipitated the litigation in the first place. I am experiencing déjà vu."
So far, of the 232 claims submitted, 14 have been paid, 26 rejected. You can bet she is going to follow up with Poorman-Douglas on every letter.
"It's going to be a case-by-case issue for which our staff will have to call Poorman-Douglas about each individual claim to find out what they did not like about the claims," she said. "For small practices like ours, the prospect of expending the amount of time and energy this will require is incredibly intimidating."
Many physicians whose practices received the same kinds of letters the Gorbacks did are frustrated by trying to decipher why a claim was defective. They're also displeased by problems in reaching Poorman-Douglas representatives to answer questions.
Despite the problems, physicians such as Dr. Gorback are finally beginning to see results from the class-action Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit filed in 2001 by the Texas Medical Association and other state medical societies. The lawsuit targeted CIGNA, Aetna, and other large for-profit HMOs. It alleged that they engaged in racketeering by maintaining claims-processing practices and systems that lowered physician reimbursement.
Both Aetna and CIGNA settled their portion of the suit and have started paying physician claims that were automatically underpaid and denied. The trial for the remaining defendants is scheduled for September in a Miami federal court. They include Anthem Inc., Coventry Health Care Inc., Humana Inc., PacifiCare Health Systems Inc., UnitedHealthcare, and WellPoint Health Networks Inc.
At press time, about 950,000 active and retired physicians had received evenly distributed payments of $100 million from Aetna. Physicians were notified in August 2003 of their choice to receive their portion in cash or to donate it to the Physicians' Foundation for Health Systems Excellence. CIGNA has paid $15 million to physicians, with $75 million to be paid.
Poorman-Douglas is evaluating claims submitted under terms of the settlement, but it is taking longer than expected to process claims because of the huge number of claims that were filed.
Tim Schmidt, chief executive officer of the Managed Care Advisory Group (MCAG), estimates that more than 700,000 claims have not been processed. MCAG is helping physicians file claims. "There was a much higher response than either CIGNA or Poorman-Douglas expected," he said.
Another problem arose when it was discovered that Poorman-Douglas was making numerous mistakes in processing claims. As a result, TMA General Counsel Donald P. Wilcox, JD, and attorneys for other plaintiffs asked that physicians be given more time to refile corrected claims if the reimbursement they receive is insufficient. The request was granted in April, and the refiling period for "defected" claims was extended from 30 to 60 days from the date the letter from Poorman-Douglas is postmarked.
TMA and the other plaintiffs also asked Poorman-Douglas and CIGNA to give physicians detailed information on the claims' deficiencies so they can realistically assess their claims status and any denials they may have received. Mr. Wilcox says the settlement requires Poorman-Douglas to give physicians information on how or why their claims were classified as defective.
Mr. Schmidt recommends physicians keep an eye out for CIGNA payments or notice of defective claims. "Physicians should do their best to correct defective claims as soon as possible. While they have 60 days to respond instead of 30, it simply comes down to the faster they respond, the faster they get paid."
Last February, one of the two foundations created by the AETNA and CIGNA settlements sought grant proposals for projects that foundation leaders say would improve physician practices. As part of their settlements, AETNA agreed to give $20 million to the Physicians' Foundation for Health Systems Excellence, and CIGNA agreed to give $15 million to the Physicians' Foundation for Health Systems Improvement.
The deadline for the first round of grant proposals for the Physicians' Foundation for Health Systems Excellence was March 1, 2005. Four hundred proposals were submitted; awards will be made in the fall.
Funding for both has increased, thanks in part to physicians who diverted the money they received from the settlement to the foundations. Money owed physicians who did not respond to an invitation to submit a claim under the settlement was also sent to the foundations. The Physicians' Foundation for Health Systems Excellence has more $70,000,000.
Overseen by TMA and 20 other medical societies who signed the settlements, the foundations have similar members on both boards of directors. TMA has an active role in both. TMA Executive Vice President Louis J. Goodman, PhD, is the secretary of the foundations' boards, and chairs both foundations' grants committees.
The boards evaluate proposals and award grants for programs to improve practice management, quality of care, and patient safety to benefit physicians and patients. Grants range from $100,000 to $1,000,000, depending on the size and scope of the organization and the project.
Erin Prather can be reached at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629.
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