Florida doctor sues health plans over out-of-network payments

A Florida orthopedic surgeon says several HMOs are paying him less than half of what they used to for treating emergency patients who subscribe to health plans in which he is not part of the network.

Now he's asking a federal court to step in and make the companies -- Aetna Health Inc., Neighborhood Health Partnership Inc., Health Options Inc. and Vista Healthplans Inc. -- pay what he sees as a fair amount for the services he provides.

Peter F. Merkle, MD, who practices in Pompano Beach, Fla., in January filed a proposed class-action lawsuit in the U.S. District Court for the Southern District of Florida alleging that four health plans conspired to cut their reimbursements to doctors who aren't part of their networks.

"I don't have an ax to grind, I just want to get paid for the work I do," Dr. Merkle said. "If someone submits a bill to me, I pay it. If the plumber comes, I pay the bill. If an electrician comes, I pay the bill. Why is a doctor any different?"

The companies named in the lawsuit deny that they are underpaying physicians and said that they are obeying Florida law.

The allegations

In Florida, HMOs are required to pay physicians who aren't part of their network by determining which is less: the doctor's charges, the usual and customary charges for similar services in the community where the services were provided, or the charge the doctor and health plan agree to within 60 days of the claim being filed.

Dr. Merkle said the companies he's suing used to abide by that law, but that he noticed that their reimbursement levels changed beginning in the middle of 2003.

In his lawsuit, he said the companies created their own fee schedule for out-of-network physicians that is an "artificially reduced payment amount." He said the payment equals about 120% of what Medicare pays.

For example, Dr. Merkle's lawsuit outlines that in 2004 Aetna paid him $668.62 for a treating a complicated wrist fracture; his usual charge is $1,850. Aetna paid more in 2002, when he charged less for the procedure. Then Dr. Merkle charged $1,550 and Aetna reimbursed him $1,168.

Health Options now pays him $469.69 for treatment of a complicated wrist fracture, according to the lawsuit. Vista pays $587.27 and Neighborhood Health Partnership pays $604.31, the lawsuit shows.

"I'm just not getting paid for what I am doing," Dr. Merkle said.

A state board that reviews pay disputes between physicians and health plans issued an order that the amount that the companies are paying is a fair amount, which is one of the reasons why Dr. Merkle is turning to the courts for help, said Lawrence Kopelman, one of the attorneys representing the physician.

"We're hoping to get the doctors reimbursement," Kopelman said. "We also want to work out a resolution with the insurance companies so that doctors will be paid an amount that is acceptable."

If that doesn't happen, Dr. Merkle said it will be a blow to physicians in Florida. He said that with his overhead rising and his reimbursement declining, it won't be economically feasible to stay in practice.

Health plans respond to the complaint

Specifically, Dr. Merkle's lawsuit accuses the health care plans of violating the RICO (Racketeer Influenced and Corrupt Organizations) Act, the federal anti-racketeering laws.

Dr. Merkle alleges that the companies conspired to underpay physicians and he's asking the court to award actual damages, treble damages and punitive damages.

The health plans deny the accusations in the lawsuit and say that they are paying non-network physicians fairly.

"Vista pays nonparticipating providers for emergency services in accordance with applicable law," said Pam Gadinsky, a spokeswoman for Vista Healthplans.

Bruce Rubin, a spokesman for Neighborhood Health Partnership, said that the allegations are baseless. He called the allegations of collusion "ludicrous."

"This is a classic example of abuse of the class-action system," Rubin said. "That results in higher health care costs."

Aetna spokesman David Carter said that Aetna typically pays more than Medicare pays for the services that are outlined in the lawsuit.

"We believe that is reasonable," he said. "While we would prefer to avoid the additional cost of litigation, we believe that the allegations in this complaint are unwarranted and intend to defend it vigorously."

A spokesman for BlueCross BlueShield of Florida -- Health Options Inc. said the company had no comment on the lawsuit.