Health plan class-action settlements: Trust, without the expiration date

The BlueCross BlueShield Assn. and more than 30 affiliated plans and subsidiaries have agreed to settle physicians' claims of improper payment practices. Now only UnitedHealth Group and Coventry Health Care remain as defendants in class-action litigation that has successfully forced most big health insurers to be more open and fair in how they deal with doctors.

The Blues settlement roughly follows the pattern of the ones before it, including revised claims-payment procedures, independent review boards to arbitrate billing disputes and a payout. In this case, it was $176 million in physician compensation and attorneys' fees. And it has one more common feature, this one less welcome -- an end date.

As is common in class-action litigation, the settlements last for only a limited time, usually three to five years. Cigna's settlement expires in September. Aetna's expires next year. Given the rocky history between health plans and physicians -- hence the settlements in the first place -- doctors have good reason to be wary of a time limit on health plans' improved behavior.

That is why it is a must that health plans, as the AMA has put it, should voluntarily and permanently establish business practices that permit fair and open dialogue with physicians.

A lasting commitment to an open and honest relationship with physicians should be something plans aspire to, not a commitment that lasts only as long as a court-brokered deal.

No doubt plans will counter that the settlements are proof of their honorable intent. If that's truly the case, it shouldn't pose such a serious problem for them to commit for the long run.

As it is, the settlements between insurers and physicians hardly have created a doctors' paradise when it comes to contract issues. Plans still cut reimbursement and instituted rules physicians found distasteful. But at least with the settlements in hand, physicians had a greater opportunity, and a more formalized structure, to do something about them.

If it isn't enough that plans not shed their settlement obligations after they expire, for the physicians' sake, then they should do it for their own. It's just good business. More and more, large firms are expressing their desire to do business with a health plan that has a strong relationship with physicians and is open with doctors -- and the employers.

Certainly, with health plan revenues and earnings continually going up, no plan can argue that conforming to their class-action settlement terms has taken away their ability to make money.

If plans aren't willing to keep up these deals voluntarily, organized medicine is ready to pressure them to do so. The AMA and state medical societies have vowed that they will continue to support physician efforts to resolve health insurers' unfair business practices.

Plans also can look forward to organized medicine's efforts to legislate good behavior. For example, in Connecticut, that state's medical society successfully pushed for a law that, effective as of October, requires all health plans to supply code payment information to physicians. That state's House and Senate also have passed a bill, awaiting the governor's signature, that would define "medical necessity" as it is in the lawsuit settlements -- care as determined by a physician exercising clinically prudent judgment consistent with generally accepted medical practices.

Meanwhile, the clock is ticking on the terms of the class-action settlements. Health plans would do well to come to the conclusion that maintaining a fair and honest relationship with physicians should not have an expiration date.