An estimated 700,000 physicians - some of whom may be West Virginians could benefit from a class-action lawsuit in a Florida federal court.
U.S. District Judge Federico A. Moreno of Miami, who granted class-action status to the doctors, rejected that status for millions of managed health care customers who allege the companies violated federal fraud and racketeering laws.
Doctors suing the health plans, like health maintenance organizations and preferred provider organizations, accuse the companies of:
* Systematically denying and delaying payments;
* Breaching contracts;
* Generally defrauding physicians, all in violation of the federal Racketeering Influenced and Corrupt Organizations law.
If successful, the physicians would force insurers to make their business practices more transparent.
West Virginia State Medical Association Executive Director Evan Jenkins said the issue of prompt payment for health care services 'is very frustrating for physicians.
In West Virginia we have strong prompt payment laws, a statute that went into effect a year ago. ... It was a very positive step.'
Jenkins said because of the prompt payment statute, he does not know what kind of involvement West Virginia doctors will have in the case, if any. 'HMO penetration in West Virginia is minimal,' he said, except in the Northern Panhandle where the Health Plan of the Upper Ohio Valley and other similar companies insure a sizable chunk of the population.
Physicians need not be directly involved in the case to be part of the class.
If the case is settled, the American Medical Association says doctors would receive a letter explaining the settlement and would have the option not to participate.
No trial plan has been set. Moreno is requiring mediation by Oct. 30, with an update presented to him in March.
Specific states involved in the suit include Alabama, California, Florida, Georgia, Louisiana and Texas.
But because the case was given global class status, all physicians who provided services to any person insured by the defendant health plans from Aug. 4, 1990, to Sept. 30, 2002, can be part of the class.
According to court documents, Moreno said the physician lawsuit qualifies as a class action because the doctors proved all U.S. physicians would be affected similarly if plans:
* Operated an automatic system of 'bundling' or 'downcoding' claims.
* Provided a bonus or other incentives to claims employees.
* Frequently made 'medicalnecessity' decisions based on nonmedical criteria.
According to the American Association of Health Plans (AAHP), the certification of a class action against health plans is contradictory at best. 'I think there is a terrific irony here, that these latest rulings occurred on a day when Congress was debating tort reform to control health care costs,' said AAHP spokeswoman Susan Pisano, referring to the House's approval of federal medical liability system reforms.
'To look at litigation broadly, including class actions, mass trials and other (issues), these kinds of things are having a terrible impact on health care,' Pisano said.
More frequent litigation, she said, reduces quality and access to care and increases costs.
'West Virginia is already seeing the impact of liability system problems,' she said.
'West Virginia has a medical malpractice crisis.'
AAHP members 'are committed to paying promptly,' she continued. 'But they also are committed to paying accurate claims. They have a legal responsibility to do this.'
She said payment delays often are the result of incomplete, duplicate or other faulty paperwork.
'The claims process is a series of interconnected responsibilities. Everybody needs to live up to their responsibilities, not just the health plans.'
A federal appeals court in Atlanta upheld Moreno's decision to give class action status to doctors, but lawyers for the insurers United Healthcare Corp., PacifiCare Health Systems, Aetna, CIGNA Corp., Prudential Insurance Co. and others are appealing to the U.S. Supreme Court.
