Connecticut doctors sue top HMOs for wrongful practices
Editor's note: On July 12, 2001, the Connecticut State Medical Society announced that it is filing a similar suit against UnitedHealthcare. This latest suit brings the number of HMOs sued by the Connecticut doctor's association to seven.
The Connecticut State Medical Society, on behalf of its 7,000 physician members, has sued six major HMOs for allegedly engaging in wrongful practices — including the arbitrary denial of "medically necessary" care, failure to properly staff clinical departments, breach of contract with doctors, and the use of computerized programs to automatically reduce or deny claims.
|"We have learned that if you must deal with wolves, you must act like a wolf."|
The six separate lawsuits — which name Aetna U.S. Healthcare, CIGNA, ConnectiCare, Anthem Blue Cross and Blue Shield of Connecticut, Oxford Health Plans, and Physicians Health Services — seek class action status and calls for both monetary damages and an end to the alleged wrongful practices. The Connecticut State Medical Society filed the lawsuits in U.S. Superior Court in Hartford on Feb. 14, 2001.
Three of the HMOs (Anthem, CIGNA, and Oxford) are also being sued by Connecticut Attorney General Richard Blumenthal on behalf of four patients who claim the plans also engage in wrongful practices, including the inappropriate use of prescription drug "formularies" and arbitrary coverage guidelines to deny patients' claims. Blumenthal filed this separate class action lawsuit on Sept. 7, 2000.
Blumenthal said he couldn't comment on whether his office would expand its lawsuit to include Aetna, ConnectiCare, and Physicians Health Services, according to Maura Fitzgerald, a spokesperson for Blumenthal's office.
The lawsuits were announced at a press conference held at the Connecticut Medical Society's headquarters in New Haven, Conn., on Valentine's Day. But there were no flowery sentiments in the comments made by Blumenthal and Tim Norbeck, the society's executive director. While Norbeck praised the efforts of Blumenthal's office to resolve problems with the insurers, he emphasized that the time has come for a legal fight.
"There is a time to communicate and negotiate, a time to legislate and regulate," Norbeck said. "We have tried them all. We have made good faith efforts to resolve our many differences with insurers. . . but we have learned that if you must deal with wolves, you must act like a wolf."
The medical society's lawsuits support the attorney general's ongoing legal action to "stop HMO abuses," according to Blumenthal. "HMOs have forced doctors to cut the quality of care simply so the companies can increase profits," he says. "The combination of patients, doctors, and my office will be a powerful agent for change and reform on behalf of better health care. It sends a compelling message to both the new [Bush] Administration and incoming Congress."
Wrongful practices identified
The Connecticut Medical Society is being represented in the lawsuits against the HMOs by the law firm of Milberg, Weiss, Bershad, Hynes & Lerach. According to the firm's attorneys, the lawsuits allege that each of the six health plans has breached the terms of its contracts with physicians and engaged in improper and/or deceptive practices in violation of the Connecticut's Unfair Trade Practices Act. As a result of the practices, the health plans are alleged to have been able to "deny, impede, delay, and reduce lawful claims for reimbursement" to thousands of the state's physicians.
The lawsuits identify specific common practices that the HMOs are alleged to have employed to breach their contracts with physicians, including:
- Arbitrarily reducing a physician's payment for medically necessary care by "downcoding," or changing claims and billing codes to indicate a doctor should be paid less. (For example, a doctor conducts an extensive office visit with a patient who has a number of health problems, but is reimbursed only for a simple office visit that is far shorter and less complicated.)
- Bundling claims, or issuing a single payment for a group of related medical services, rather than paying for each service individually.
- Arbitrarily overruling a physician's determination of medical necessity without conducting a proper analysis or review.
- Failure to pay physician's in a timely fashion.
- Failure to provide a proper explanation when a claim has been denied payment.
- Failure to pay interest on claims according to the state's prompt payment law.
- Failure to properly staff clinical departments.
- Engaging in improper claims review by employing computerized programs to automatically deny or reduce claims by downcoding.
- Exploiting the parties' unequal bargaining power to force physicians to enter into one-sided, non-negotiable contracts that infringe on the physician/patient relationship.
|"The lawsuit appears to be completely unfounded and without merit."|
While the insurers have not yet had the opportunity to review the complaint, Oxford officials voiced disappointment over the action and the statements made by Blumenthal and Norbeck.
"The lawsuit appears to be completely unfounded and without merit, as was the lawsuit filed by the Attorney General's office in September of last year," says Oxford spokesperson Maria Gordon-Shydlo. "The suit was filed without consulting us and without verifying any of the basic allegations. As we had offered last fall, we again welcome the opportunity to sit down with the Attorney General — and now the doctors involved — to resolve these concerns."
Anthem officials say they also can't comment on the specifics of the lawsuit because they have not yet seen the complaint. However, Anthem spokesperson Patty Coyle Locke says Anthem is "focused on providing quality service to our customers and working collaboratively with our provider partners." She also stressed that Anthem "doesn't believe that the judicial system is the most productive forum for dealing with these issues."
Gail Silver, a CIGNA spokesperson, echoed the other insurers concerns that she had not seen the lawsuit, however she says, "CIGNA believes the suit is unwarranted. . . We take our claims and payment responsibilities very seriously."
The issues detailed in the lawsuit have been front and center for well over a year and shouldn't come as a surprise, according to Connecticut Medical Society spokesperson Susan Schaffman. "These [responses] are smoke screens," Schaffman says. "We welcome open dialogue, but we can sit down and sit down and talk until we are blue in the face. Now it's time for action."