With more than 900,000 physicians represented by medical groups, including state and county medical societies, the lawsuit filed under the Racketeer Influenced and Corrupt Organizations Act (RICO) against for-profit health plans is the largest class action health-care lawsuit filed in the United States. The lawsuit began in Alabama in 1999, when a physician sued Humana, CIGNA, and several other HMOs. The doctor alleged that health insurers used fraudulent marketing tactics and financial incentives to restrict patient care, thereby breaching their obligations under federal law to provide necessary medical care. Within a year, a score of other suits making similar allegations were filed on behalf of patients and physicians. Ten of the largest managed care companies were named in the suits. The lawsuits were consolidated under a single federal judge in Miami.
Aetna, CIGNA, HealthNet, Prudential, Well-Point, Anthem, and Humana have settled. Claims against PacifiCare, United Health Group, Inc., and Coventry Health Care, Inc., the final defendants in the RICO lawsuit, were dismissed. (Of note, PacifiCare has merged with United.) The value of the settlements exceeds $1.5 billion in retrospective and prospective relief. Key strengths of the settlements include a definition of “medical necessity” that is based on the physician's judgment; the acceptance of paper claims (no forced electronic billing); and judicial oversight of any disputes filed by physicians. Visit hmosettlements.com to get further information on the settlements or instructions on filing a dispute.
Judge Frederico Moreno, a Miami federal appeals judge, acknowledged the patterns and problems, but ruled that there was insufficient evidence that the insurance companies had conspired with one another. This decision seemed especially puzzling since the points at issue were almost identical to those against the other companies, where the judge had decided in the opposite way. The dismissal has been appealed to the 11th circuit in Atlanta.
Janis G. Chester, a psychotherapy associate, and I wound up representing all of psychiatry in the RICO negotiations, working closely with the RICO attorneys on those aspects of the case affecting the delivery of psychiatric care. The protection of psychodynamic psychotherapy (and, by implication, psychoanalysis) has always been at the forefront. This has been true especially in the area of privacy of records.
In this part of the negotiation, for strategic reasons, we worked as individuals, not as representatives of any professional organization. Consequently, this was done entirely at our own expense. At no time has there been any cost to the Association.
On the other hand, the Association has been a signatory on all the settlements, again at no expense. What this means is that the Association can represent any individual member in a dispute with any of the signatory HMOs, rather than that member having to go up against the HMO alone. There is court-mandated oversight of the settlement provisions. We also have potential access to funds provided by the settlement upon approval of grant applications.
Each member of the “class” (each physician) is entitled to a cash settlement. Although each share is small ($40-$100, generally), the signatory status of the Association allows each member to donate his or her share to the organization, so that collectively it can be significant. Many members have generously contributed in this way.
There have been two settlement awards received. For Aetna, the Association received $77,000. For WellPoint, about $15,000. There is one more, HealthNet, in the pipeline. If the appeal succeeds, there may be more.
As agreed, these funds are used for special projects to protect our patients and our profession. Each request for funds is made by the chair of the Government Relations Committee to the Executive Committee. A few of the many projects are listed below:
Oxford Health Plan: protection of members and patients from demands for records by HMO [see “Strategic Planning: Now the Hard Part,” TAP 39/3].
Eist Case: protection of patient records from medical boards [see “Politics and Public Policy,” TAP 41/1].
Hurricane Katrina: emergency licensing of members.
Ashcroft-Abortion Cases: help to six hospitals to resist subpoenas.
D.C. Privacy Law: help with negotiations with insurance commissioner [see “APsaA Helps Achieve Consensus on Model D.C. Confidentiality Law,” TAP 40/2].
Capitol Hill Breakfast (June 15, 2006): with National Association of Social Workers (NASW), to observe 10-year anniversary of Jaffe vs. Redmond [see “The Association's March on Washington,” TAP 40/3].
Privacy Protection: introduced into electronic medical records legislation [see “Politics and Public Policy,” TAP 40/3].
The RICO attorneys filed a separate suit against the not-for-profit Blue Cross companies. This case is currently in court ordered mediation.
If Aetna, CIGNA, WellPoint, Humana, or HealthNet fail to do business in a reasonable manner, file a dispute. You need not be contracted with the company to file a dispute, which can be based on medical necessity, billing, or compliance. Visit the hmosettlements.com Web site or call Dean K. Stein, executive director, at the American Psychoanalytic Association (212-752-0450) or me (781-235-6211 or ) for further assistance.