August 2005 Newsletter

Reimbursement Lawsuits

Prudential, WellPoint, and Health Net Settle Physician Lawsuits

By: , Compliance Officer

Three additional payers have settled national class actions brought by physicians. Similar to earlier settlements with Aetna and Cigna, WellPoint, Health Net, and Prudential have avoided a protracted, expensive court fight. These agreements emerge from a massive class action suit targeting 10 large managed care payers. The physicians and state medical societies accused the health plans of interference with the patient/doctor relationship and the use of improper payment practices.

The settlements include industry improvements to physician related business practices as well as payments to physicians in accordance with terms outlined within the various agreements. The terms of the settlements will help to streamline communication between physicians and the companies, reduce administrative complexity in the claims payment systems, and help improve the quality of the health care delivery system. The business practice changes are expected to result in increased speed of claims payment and giving physicians and their office staffs more time to focus on providing health care to patients. The settlements also provide for funding for two separate not-for-profit foundations dedicated to improving the quality of health care in America.

The WellPoint and Health Net agreements established settlement funds that allow physicians to file for nominal compensation. Physicians who provided services during a specified time period to any individual covered by WellPoint or Health Net will be able to file a claim. Unlike the other settlements, the Prudential agreement does not contain a fund to be distributed. Additional information about all the HMO settlements is available on the American Medical Association and HMO Settlements Web sites.