Managed Care Class Action Settlement: Refund Oppor

Tuesday, January 02, 2007 at 8:57:05 AM

The impending settlement of a class action lawsuit brought by physicians against managed care companies may present you an opportunity to seek cash refunds for your hospital related to physicians your facility employs.

In addition, this is an opportunity to inform physicians who work at your hospital but are not employed by your facility about cash refunds for which they may be eligible.

A class action lawsuit against Aetna, Inc., CIGNA Healthcare, Prudential Insurance Company, HealthNet, Humana Health Plan, United HealthCare, Coventry Health, PacifiCare, Anthem, and WellPoint Health Networks alleging improper and illegal reimbursement practices to delay or deny payment has reached a settlement resulting in cash payments of more than $450 million in refunds to physicians and changes in the way these companies do business.

While the deadline for applying for settlement funds is past for this case, parallel litigation against the remaining BlueCross BlueShield Plans (including Empire, Excellus, WellChoice, BlueCross BlueShield of Western New York, and BlueCross BlueShield of Northeastern New York) is nearing settlement and, based on past settlements, the pool for physician refunds is expected to be worth between $200 million and $300 million.
The average return for each physician who applies for the refund is likely to range from $1,000 to $2,000.

Physicians or hospitals on their behalf, may apply for settlement funds directly with the BlueCross BlueShield plans. Details for direct application will be released when the settlement is finalized.

In addition to the cash settlements, the ongoing HMO settlements are estimated to result in more than $1 billion in forward savings for physician practices due to changes in contracting and claims payment policy changes mandated by the settlements.
There are many new rights and payment rules favorable to physicians in these settlements, but most physicians and hospitals are unaware of their gains and many may unwittingly be negotiating these new rights away in their new payer contracts.
Among other stipulations, the insurance companies agreed to:
- disclose policies regarding claim coding and payment;
- adhere to most American Medical Association Current Procedural Terminology (CPT) codes, guidelines, and conventions;
- make fee schedules available to physicians;
- adhere to more restrictions on "silent preferred provider organizations" and the resale of pricing discounts;
- implement more restrictive "overpayment recovery" rules; generally a 12-18 month limit on recovery; and
- offer improved dispute resolution procedures with strict limits on the cost of arbitration.
Additional information about the HMO settlements is available online at http://www.hmosettlements.com.
Jeffrey Gold
Vice President, Managed Care and Special Counsel
jgold@hanys.org
December 21, 2006


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