700,000 doctors sued for underpayments on claims

Article from the Ventura County Star Online
 

The lawsuits allege that WellPoint and other major health insurance organizations developed software that automatically reduced doctor claims, resulting in doctors receiving less for their services. The settlement, if approved by the U.S. District Court judge handling the case, would resolve suits against major managed care companies and against the Blue Cross Blue Shield Association and Blue Cross and Blue Shield companies, the company said Monday.

WellPoint Inc., based in Indianapolis, was created from the merger of WellPoint Health Networks Inc. in Thousand Oaks and Indianapolis-based Anthem Inc. in 2004. The suits were filed against both companies before the merger.

"We've been working with the attorneys for the plaintiffs for some time," said WellPoint spokesman Jim Kappel. "It's important to put this litigation behind us."
WellPoint would pay $135 million to physicians and $5 million to a not-for-profit foundation to promote higher quality healthcare and better care for the disadvantaged and underserved. The company will pay up to $58 million for legal fees as determined by the court.

The settlement would result in a pre-tax expense of $103 million for the second quarter for WellPoint, a 10-cents per share expense after tax, the company reported.
Though the settlement is substantial, the medical societies and professional organizations involved in the suit were more concerned with changing the system than recouping the money lost to underpayment, said Archie Lamb, an attorney for the doctors.

The settlement is similar to the five other settlements that have come out of this case for companies such as Aetna Inc. and Health Net Inc., Lamb said.
The major changes were to define the medical necessity of treatment clinically and not based on cost, and to mandate an external appeal process for doctors.
Kappel said the agreement reinforces efforts WellPoint already is making to create more efficiency in the system. Those efforts include making fee schedules more easily available to doctors through the Internet or CD, making all medical policies available over the Internet and setting a uniform maximum number of days for payment for claims to speed the process.

The California Medical Association is one of 18 organizations supporting the proposed agreement. The association was the first to bring the lawsuit under federal racketeering charges against WellPoint. That and other suits brought by the organization eventually were consolidated with dozens of others into the national class-action suit.
The association's president-elect, Dr. Anmol Mahal, said the association was very happy with the settlement. "We're hoping that the remaining defendants will come forth and do what's right," he said.

WellPoint's action could have an effect because of its size in the industry, with 28.5 million customers.

Four companies are still involved in the class-action lawsuit, which goes to trial in January: UnitedHealth Group Inc., Humana Inc., PacifiCare Health Systems Inc. and Coventry Health Care Inc.

UnitedHealth Group's spokesman, however, said the company has had every claim in the original case against it dismissed or addressed except for the suggestion that it conspired with managed care companies to "downcode" doctors' claims for a lower reimbursement rate.

"We did not conspire," Minnetonka, Minn.-based UnitedHealth spokesman John Penshorn said. "We have no interest in 'settling' a purported claim when we in fact did nothing wrong. And we do not see how payment of millions of dollars to plaintiffs attorneys would, in fact, advance the affordability of healthcare."
WellPoint's stock rose 46 cents Monday to close at $71.21 Monday.