High court OKs doctors' suits over insurance pay

Justices also declined to hear a lawsuit challenging the HIPAA privacy rules.

By Amy Lynn Sorrel — Posted Nov. 13, 2006

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The beginning of the U.S. Supreme Court term brought a victory to thousands of Kentucky and Ohio physicians when the high court turned down United Healthcare of Ohio's request to block the doctors' lawsuits alleging health plan price-fixing.

The Supreme Court's Oct. 2 decision clears the way for the Academy of Medicine of Cincinnati to go to trial over claims that United conspired with other health plans to hold down physician reimbursement rates in the area.

The doctors also filed antitrust lawsuits against Aetna, Humana and Anthem Blue Cross and Blue Shield. Those plans settled, although they admitted no wrongdoing.

United held out, arguing that an arbitration clause in the doctors' contracts required them to resolve their differences out of court. The insurer asked the high court to review the case after the Ohio Supreme Court in March rejected its claims and said the doctors' lawsuit could proceed.

Now that the decision stands, doctors have some ability in certain situations to be able to go to court to decide their claims, instead of being forced to negotiate on the insurer's terms, said the Academy of Medicine's attorney, Richard S. Wayne.

United spokeswoman Debora Spano did not respond to the allegations in the lawsuit, but said: "We will continue to vigorously defend the case as it goes forward."

In their lawsuit, the doctors accused United and the other plans of conspiring to fix payment rates, which they claim were 30% below what doctors received in other Kentucky and Ohio areas. The low fees, physicians said, reduced access to care in the region by discouraging them from practicing there, according to court documents.

"We felt our dispute had nothing to do with the contract but with [the health plans'] collusive behavior regarding reimbursement, and that was outside of the scope of the contract," said Bruce Haskin, executive director of the Academy of Medicine of Cincinnati, which filed the lawsuit on behalf of more than 2,000 area doctors.

But United had argued that the arbitration provision in the doctors' agreements covered "any disputes about the parties' business relationship," court records show.

The Ohio Supreme Court determined that, although the clause was "broad," the doctors' antitrust claims did not relate to their individual contracts with the health insurance companies.

The Academy of Medicine also filed a lawsuit in Kentucky because Cincinnati borders the state. Judges at both the trial and appeals court levels in Kentucky also affirmed the doctors' right to take their claims to trial.

The cases will return to the Boone County Circuit Court in Kentucky and the Hamilton County Court of Common Pleas in Ohio. No trial dates are scheduled.

Jeff Blunt, a spokesman for Humana, which settled in 2003, said in response to the U.S. Supreme Court decision: "The settlement allowed us to continue our strategy of responsible investment in the physician community, and we believed that putting the suit behind us was in the best interest of physicians, Humana and ... the community."

On the same day, Supreme Court justices declined to hear a case challenging the HIPAA privacy rule, to the chagrin of several patient advocacy and mental health groups that sued the Dept. of Health & Human Services in 2003.

The organizations alleged that the privacy rule is unconstitutional because it allows health care professionals to disclose private health information for "routine uses," such as treatment, payment or health plan operations, without first seeking patient consent.

"It is no longer possible for a patient and a doctor to agree that medical records are kept between the doctor and the patient," said James S. Turner, board chair and attorney for Citizens for Health, the nonprofit consumer health care advocacy group that filed the lawsuit.

"Now they are forwarded by electronic mail to on the order of millions of other people," Turner added.

The groups appealed a 2005 decision by the 3rd U.S. Circuit Court of Appeals to dismiss the lawsuit. Patients' privacy rights were not violated by the rule, which "attempts to strike a balance between the two competing objectives of HIPAA -- improving the efficiency and effectiveness of the national health care system and preserving individual privacy in personal health information," wrote appeals court Judge Marjorie O. Rendell.

The privacy rule also allows states to come up with more stringent measures to protect confidential health information, the court noted.

The 3rd Circuit upheld a similar decision by the federal district court in Philadelphia in 2004.

The department did not return calls for comment. But in a statement after the 2004 trial court ruling, then-HHS Secretary Tommy G. Thompson said: "The court's decision supports our authority to protect the privacy of patient health information in a way that does not impede their access to quality health care."

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