In UnitedHealth case, doctors see the benefits from their day in court

A major victory for physician advocacy became complete recently with a federal court judge’s approval of payments to be released from a historic settlement between health insurers and the out-of-network doctors they underpaid for years. But the legacy of this win — as with all those that come from vigorously defending the legal interests of physicians and their patients — will be felt for years to come.

With the judge’s approval, nearly $200 million in awards started going out to doctors from UnitedHealth Group to settle claims that the insurer used a flawed database it owned to systematically lowball out-of-network pay rates over an extensive period of time.

This behavior went on for about 15 years, and it took a decade-long fight led by the Litigation Center of the American Medical Association and the State Medical Societies to force United not only to stop its behavior, but to pay physicians back for the years of underpayment.

United did not admit any wrongdoing in the settlement. But physicians whose patients chose to see them out of network know that they were wronged, and those who will be receiving compensation will realize that significant pressure was brought to bear to make things right again.

Physicians affected who filed timely claims in 2010 and were approved for payouts should receive those checks no later than April 15. Those doctors who moved in the meantime or for some other reason didn’t receive their checks by then should contact the claims administrator, or the managed care advisory group with whom they filed their claims. The AMA, which has helped affected physicians through every step of the process, has more information online on how to inquire about claims status (link).

But the more lasting effects of this settlement will survive long after the final settlement checks have been received by approved claimants. And many more physicians and patients than the ones who were harmed directly will see the benefits of that.

As part of the settlement, United and other major health insurers have agreed to outsource the important job of setting usual, customary and reasonable rates for out-of-network services. That’s the process that shortchanged doctors when insurers were in control of it despite the massive conflict of interest that it posed. Under legal pressure from then-New York Attorney General Andrew Cuomo — who was alerted by the AMA to the years of underpayment — the insurers agreed to help pay for a new, independent system that would cut out the abuse.

The result, FAIR Health Inc., has been in operation for more than two years. Its continuing mission is to ensure that physicians never again need to worry that the rates they are receiving have been surreptitiously and artificially deflated by insurers. And patients who choose to go out of network should never again need to worry that their favorite doctors are being cheated because of that choice.

Physician advocacy takes many forms, and much can be accomplished by organized medicine keeping open lines of communication with payers and others with whom doctors might have some serious disagreements. But when that strategy cannot procure acceptable results, physicians sometimes do need to turn to the courts for relief.

That’s where the Litigation Center comes in. Everybody needs a good lawyer at some point. When the stakes are as high as they were in this case, what’s needed is the strongest legal representation possible.

The United settlement and the lawsuit that led to it is the perfect example of this. Given how systemic and entrenched the insurance abuses were in this case, affected doctors would not have gotten far challenging the insurers in court on an individual basis. But with their voices combined and amplified through the Litigation Center, physicians were able to keep up the pressure and emerge victorious after their multiyear battle.