CMA's RICO Lawsuit Update
[Posted 07/21/05]

The RICO class action lawsuit won another significant victory this past month when Anthem/Wellpoint settled with physicians. It is the fifth major insurance giant to settle with CMA and the other plaintiffs. Through this and previous settlements, physicians will receive more than $344 million in cash payments from health plans and court-ordered reforms valued at more than $1 billion.

CMA started the case five years ago, challenging the rapacious tactics of the for-profit managed care industry. The case allowed physicians to air profound grievances against an industry that has arrogantly and unfairly exploited them for well more than a decade.

As a federal appeals court said in 2004: “It would be unjust to allow corporations to engage in rampant and systematic wrongdoing, and then allow them to avoid a class action because the consequences of being held accountable for their misdeeds would be financially ruinous.”—11th Circuit Court of Appeals, September 1, 2004.

The suit grew to become the largest class-action health care lawsuit filed in the United States, with more than 800,000 physicians and 19 state and county medical associations joining CMA as plaintiffs. The suit alleges that the defendant health plans—WellPoint, PacifiCare, Health Net, Aetna, CIGNA, United, Anthem, Coventry, Humana and Prudential—have engaged in fraud and extortion in a common scheme to wrongfully deny payment to physicians, in violation of federal civil racketeering law. The case is being heard before Judge Federico Moreno in federal district court in Miami and is set for trial in January.

What Has Been Accomplished to Date
Damages and Prospective Relief: More than a year ago, the court approved settlements with Aetna and CIGNA, This year, preliminary approval was given for settlements with Health Net, Prudential, and WellPoint/Anthem.

In addition to $585 million in monetary damages—about two thirds going directly to physicians and one third to our lawyers—these settlements reflect a binding commitment by these companies to provide an unprecedented level of transparency and fairness in their future payment practices and other business dealings with physicians for a minimum of four years. These prospective commitments have been valued far in excess of the monetary relief—at well over $1 billion.

Physicians’ Foundations: The Physicians' Foundations set up under these settlements have more than $100 million on deposit, with more to come. The foundations are dedicated to forward-looking research and development that improve practice viability and make it easier for physicians to provide quality medical care to their patients. CMA CEO Jack Lewin, M.D., is vice chair of both these foundations.

Enforcing Your Rights
Damages: While the Aetna and CIGNA claims periods have passed, virtually all physicians are still eligible to obtain some monetary relief in connection with both the Health Net and WellPoint/Anthem settlements. All that is required is the timely filing of simple claims forms. The proof-of-claim deadline for the Health Net settlement is September 21 and for the WellPoint/Anthem settlement, sometime in November.

Prospective Relief: Physicians should ensure these plans keep their promises. Each settlement includes an easy to use “compliance” process, which is available without charge to every physician in the country who has not opted out of the settlement. Each health plan that settled has also agreed to a streamlined, external dispute resolution process for individual payment disputes.

For more information on the Physicians’ Foundations, go to http://www.physiciansfoundation.org.