Fed up with unfair practices by some insurance companies, more physicians are heading to the courtroom to resolve conflicts with insurers, litigation experts say. In the last year, doctors in various states took legal action against insurers for such allegations as claim denials, underpayments, and network exclusions.
"Providers are becoming increasingly frustrated [with insurers] on a number of different areas," said David Doyle, founder and CEO of CRT Medical Systems, a medical billing and practice-management company based in Novi, Mich. "Physicians are saying, ‘Enough.’ They’re taking the offensive position and going after the payers."
Dr. Myles Riner
Recent lawsuits highlight this growing trend. In Connecticut, the medical associations of Fairfield and Hartford counties in November issued a legal challenge against UnitedHealthcare for terminating more than 2,000 doctors from its Medicare Advantage plan network. Physicians claim the terminations were made without cause and will severely harm patient care. UnitedHealthcare has said the restructuring was made to encourage higher quality health care coverage. A district court on Dec. 5 temporarily halted the terminations after the medical associations sought emergency relief.
In the fall, the U.S. District Court for the Northern District of Illinois said a lawsuit brought by an Illinois dermatologist could stand against Humana Insurance Co. The doctor claims the insurer informed his patients falsely that he was no longer in the insurer’s network and to find another doctor. The district court found the doctor had alleged sufficient facts to support his claim of tortious contract interference.
Meanwhile, a Los Angeles Superior Court judge ruled on Dec. 9 that a suit by the California Medical Association and several dozen doctors to move forward against Aetna. The CMA sued Aetna in 2012 for allegedly underpaying out-of-network physicians and failing to approve some out-of-network services.
Aetna moved to dismiss the suit, but the court ruled the doctors pled valid claims under the state’s unfair business practice law. A similar lawsuit over payment denials by the Los Angeles County Medical Association is pending against insurer Health Net.
One reason for the increase in lawsuits is that physicians are better at recognizing insurers’ errors than they were in the past, according to Elizabeth Woodcock, founder of Woodcock & Assoc., a medical practice consulting firm in Atlanta.
"As we’ve gotten more electronic systems, [payment issues] become more identified," she said. "We’ve become better at picking these things up."
Historically, doctors primary struggles with insurance companies consisted of late payments and retroactive denials related to eligibility issues, according to Mark *S. Kopson, a Michigan health law attorney and vice chair of membership for the American Health Lawyers Association’s Payers, Plans and Managed Care Practice Group. Today, insurance battles more often stem from disputes over medically necessary treatment and disagreements over pay for performance measures, he said.
"Those are becoming more prevalent and that’s largely due to the change in reimbursement methods," he said. "The Affordable Care Act has had an impact on the issue. There’s a significant increase in performance-based reimbursement."
Network exclusions and terminations are also a growing catalyst for litigation by doctors, legal experts said. Plans are moving to more restrictive networks to leverage physicians into accepting lower contract rates, and to maintain profits and price competitiveness in the market, said Dr. Myles Riner, a managed care consultant and past president of the American College of Emergency Physicians California chapter.
In addition, insurers often attempt to boot physicians who are viewed as "complainers," said Andrew H. Selesnick, a partner at Los Angeles-based Michelman & Robinson, and chair of the firm’s Healthcare Law Department. Mr. Selesnick recently represented a client who received a network termination letter after the doctor successfully advocated for a Medicare patient to receive coverage for a treatment. The insurer withdrew the termination after Mr. Selesnick argued the move appeared retaliatory and warned of pursuing an injunction.
"For the most part, [network] terminations are profit or retaliation motivated," he said. "You really need to fight those bogus terminations."
Physicians’ success suing over insurer conduct has been mixed. For example, In April, jurors awarded Dr. Jeffrey B. Nordella, a California family physician, $3.8 million in damages after Anthem Blue Cross excluded him from its network. Dr. Nordella claimed the insurer was retaliating against him for his advocacy of patients who were denied coverage.
But in May, a Washington state appeals court threw out a lawsuit by the Washington State Medical Association over fair payments for out-of-network emergency services. The WSMA had sued state Insurance Commissioner Mike Kreidler for allegedly failing to enforce a state law compelling insurers to pay the cost of patients’ out-of-network emergency treatment. The court said the association had no grounds to sue Mr. Kreidler.