|
Managed Care RICO Lawsuit Yield Gains |
||
|
By Catherine I. Hanson CMA Vice President and General Counsel
|
||
|
The
California Medical Association has been a key participant in this case
virtually since its inception. On May 18, 2000, CMA’s Board of Trustees
voted unanimously to become the first medical association in the country
to participate in this historic case. Retaining a team of highly qualified
and visionary attorneys, CMA became a plaintiff against the three largest
for-profit managed care companies in California—WellPoint, PacifiCare,
and Health Net. CMA’s complaint alleged that these plans had engaged in
fraud and extortion in a common scheme to wrongfully deny payment to
physicians and thereby had committed a civil violation of the Racketeer
Influenced and Corrupt Organization Act (RICO). The complaint sought only
injunctive relief—a court-enforced assurance that these systematic
abuses would end. After CMA’s complaint
was filed, it was consolidated with other cases from around the country,
in what is known as “Multi-district Litigation.” These cases included
cases filed by individual physicians for economic damages, including
several courageous CMA members who agreed to be class-representatives and
bear the burden of extensive requests for discovery and depositions. There
were also cases filed by other state medical associations for injunctive
relief, and cases against other for-profit health plans dominant in other
parts of the country. Ultimately, 10 defendants were named, including
WellPoint, PacifiCare, Health Net, Aetna, CIGNA, United, Humana,
Prudential, Anthem, and Coventry. These cases were all
sent to the U.S. District Court in Miami, to be heard by Judge Federico
Moreno. Judge Moreno has proven to be an extremely competent and fair
judge, recently characterized by the Court of Appeals as “a veritable
Leviathan.” Equally important,
CMA’s RICO attorneys—Archie Lamb, Joe Whatley, Nick Roth, and Dennis
Pantazis—have more than fulfilled their commitment to CMA. Not only have
they ably and steadfastly fought off a barrage of maneuvers by the managed
care industry to keep this case from being heard, but they have taken the
requests of the CMA Board of Trustees to heart. They have ensured that
redress is sought for all physicians—whether practicing solo, in small
groups, or large practices, and whether paid fee-for-service or
capitation—and have further ensured that no defendant is allowed to
settle until the Settlement Agreement is fully reviewed and approved by
the CMA Board. What Has Been Accomplished to Date? So far, two of the 10
defendants, Aetna and CIGNA, have settled. Consistent with CMA’s goal,
the greatest value of these Settlements is in the business practice
changes these companies commit to going forward. Agreeing to a “sea
change” in their relationship with physicians, Aetna and CIGNA have
promised an unprecedented level of transparency and fairness in their
payment practices. Specific commitments include •
Better Medical Necessity Definition - Patients will
be entitled to receive medically necessary care as determined by a
physician exercising clinically prudent judgment in accordance with
generally accepted standards of medical practice, and cheaper alternatives
are permissible only when they are “at least as likely to produce
equivalent therapeutic or diagnostic results.” (Aetna and CIGNA
Settlements §7.16) •
Payment of Vaccines and Vaccine Administration -
Recommended vaccines and injectables and the administration of such
vaccines and injectables, will be reimbursed. (Aetna and CIGNA Settlements
§7.14) •
Reduced Downcoding - Evaluation and management codes
will not be automatically downcoded. (Aetna and CIGNA Settlements §7.19) •
Fairer Payment Rules - CPT coding edits will comply
with almost all of the guidelines contained in the AMA CPT Book. (Aetna
and CIGNA Settlements §7.20) •
Fewer Contract Changes – No material adverse change
to a contract may be made on less than ninety (90) days written notice.
(Aetna and CIGNA Settlements §7.6)
–Fee schedules can be changed once a year only. (Aetna and CIGNA
Settlements §7.14) • Disclosure of Payment Rules - Payment rules will be
consistent across all company products. (Aetna and CIGNA Settlements §7.8(a))
–Aetna will make a web-based pre-adjudication tool available on the Aetna Web
site so physicians can determine what they will be paid. (Aetna Settlement
§7.8(b))
–Aetna will disclose on its Web site its payment rule or approach
in each area in which CMS (Centers for Medicare and Medicaid Services) has
promulgated a definitive rule or approach. By May 6, 2004, it will
disclose a list of each Aetna-specific customization to its standard
claims editing software product, as well as any circumstances where it
concludes particular services relative to modifiers 25 and 59 are not
appropriately reported together. (Aetna Settlement §7.8(c))
–If one becomes available in commercially reasonable terms, a
Web-based pre-adjudication tool will be available on the CIGNA Web site so
that physicians can determine what they will be paid. (CIGNA Settlement §7.8(b))
–CIGNA’s Computer claims processing software will be identified
by name and version, and each claim coding and bundling edit that results
in a substantial number of (at least 500) denials or reductions will be
“described with particularity.” CIGNA will further identify any coding
and bundling edits it applies to Category One claims, its policies for the
reimbursement of supplies, and its policies for reducing payments for
second and subsequent procedures performed on the same patient on the same
date. (CIGNA Settlement §7.2(b)) (For a listing of “Category One Claims,” go the RICO
Resource Center at www.cmanet.org)
• Capitation from Date of Enrollment - Capitation fees
will be paid when the patient chooses a PCP or is assigned to a PCP,
retroactive to date of enrollment. (Aetna and CIGNA Settlements §7.28) • Participation in Pharmacy Risk Pools Optional –
Neither Aetna’s nor CIGNA’s contracting policies will require the use
of pharmacy risk pools. (Aetna and CIGNA Settlements §7.29) •
Stop-loss Insurance May Be Purchased Elsewhere –
Neither Aetna nor CIGNA will restrict physicians from purchasing stop-loss
coverage from other insurers. (Aetna and CIGNA Settlements §7.29) •
Faster Credentialing – Aetna has agreed to make
commercially reasonable efforts to complete primary source verification
within ninety (90) days of receiving a completed application for a new
participating physician group member, and that the credentials committee
will meet at least once every forty-five (45) days to consider these
applications. CIGNA has agreed that new physician group members will be
credentialed within 90 days of application, which physician groups can
submit prior to
their employment, and little or no additional credentialing will be
required when already credentialed physicians change employment or
location. (Aetna and CIGNA Settlements §7.13) • Arbitration Fees Capped - Arbitration fees for solo
and small group physicians (less than five for Aetna, through six for
CIGNA) will be capped at $1000. (Aetna and CIGNA Settlements §7.29) • Nonparticipating Physicians Protected - Disparaging
language will be removed from EOBs, and the Agreement will not change or
alter the rights of nonparticipating physicians to balance bill patients
or to avoid dealing with Aetna or CIGNA. (Aetna and CIGNA Settlements §§7.21
and 7.29) Moreover, CIGNA will identify any databases it licenses from
other parties to determine “reasonable and customary billed charges,”
and will disclose the data it used to make any specific determination that
is challenged. (CIGNA Settlement §7.14(c)) •
No HIPAA Mandate - Nonparticipating physicians will
not be forced to use electronic transactions or otherwise become HIPAA
compliant, and both companies agree to continue to accept paper claims.
(Aetna and CIGNA Settlements §§7.17 and 7.29) • Restrictive Endorsements Limited – CIGNA has agreed
that when the check is a partial payment of allowable charges, physicians
may cash a check with “Payment in Full” on it without waiving the
right to pursue a remedy under the Settlement. (CIGNA Settlement §7.29) •
Better Mental Health Coverage - CIGNA will generally
apply the §7.16 definition of medical necessity described above to mental
health care, including treatment for psychiatric illness and substance
abuse, it will treat its participating psychiatrists like its other
participating physicians with respect to its provider directories and
referrals, and it will adhere to the “prudent lay person standard” for
emergency services, including admission, or physical or chemical
restraints. (CIGNA Settlement §7.33) These
companies also agreed to a fast and fair system for resolving physician
payment disputes or disputes over medical necessity, where the ultimate
decisions are made by an independent company that relies on certified
coders and clinical specialists to adjudicate claims. For disputes over
the Settlement terms and compliance responsibilities, including any
systemic failure to comply with the new payment rules, the companies
agreed to a separate process. In the “Compliance Dispute Process,”
physicians’ claims will be prosecuted without charge by
Julia Stewart, an attorney who has worked on this case for years, and the
ultimate decision will be made by Judge Moreno, the federal circuit judge
who has so ably handled this case to date. Additionally,
these companies agreed to some payment for the past damages physicians
have suffered. Aetna committed $100 million to class-members and an
additional $20 million to a new foundation devoted to assisting practicing
physicians enhance their ability to provide quality medical care. This
money will be paid as soon as the pending appeals are resolved. CIGNA has
committed $15 million to a similar foundation and a minimum of $70 million
to class-members and has additionally agreed to pay whatever amount is
required to member physicians who can document improper downcoding or
bundling or refusals to pay for covered medically necessary services as
set forth in the Settlement Agreement. The CIGNA claim filing period is
currently under way. While these payments will not remotely make
physicians whole for the harms they have suffered, they are not
insignificant, particularly when coupled with the value of the business
changes discussed above, changes that have been estimated conservatively
to be worth more than a billion dollars. What Happens Next? With the 11th
Circuit’s recent ruling upholding its class-action status, the last
major hurdle to the trial should be removed. Our attorneys are working
feverishly to prepare for that trial against the remaining defendants,
which is currently scheduled to start March 14, 2005. At the same time,
Court ordered mediation continues, and it is anticipated that one or more
of the remaining defendants will decide to settle rather than bet their
company’s future on the outcome of a trial. Why Your SMCMA/CMA Membership Matters? There is no way an
individual physician, or even a large physician group, can effectively
take on the for-profit managed care industry, or any of the other problems
currently plaguing the profession. It is only through the profession’s
organized advocacy—in the legislature, before the regulators, with the
press, and ultimately when those alternatives fail, in the courts—that
physicians’ voices can be heard. For example, this case has already
consumed more than $10 million in out-of-pocket costs and hundreds of
thousands of hours of attorneys’ time, and that is after the years of
effort CMA and its leaders had spent documenting the problems and trying
to resolve them. The only way the profession will be able to maximize its
ability to improve the quality of care and the health care system is
through effective advocacy in all these arenas—and effective advocacy
requires the power of the profession’s collective effort. For More Information For more information on CMA’s RICO lawsuit, including information on how to maximize the amount of CIGNA damages you can recover, go to the CMA’s RICO Resource Center at www.cmanet.org or www.smcma.org. For more information specific to the business changes Aetna and CIGNA have agreed to, and how to help ensure they keep their promises, see CMA ON-CALL document #0108, “Aetna/CIGNA RICO Settlements.”
|