December 04, 2009
1 min read
Save

Court tentatively approves legal settlement between AMA, UnitedHealth Group

A federal court preliminarily approved the $350 million settlement of a class-action lawsuit filed by the American Medical Association and other plaintiffs against UnitedHealth Group, according to an AMA press release.

In the suit, originally filed in 2000, the AMA, Missouri Medical Society, New York State Medical Society and other entities asserted that UnitedHealth Group colluded with others to underpay physicians for out-of-network services. The plaintiffs sought relief for physicians who were underpaid because of UnitedHealth Group’s use of a database operated by Ingenix, a UnitedHealth subsidiary.

In 2008, the New York Attorney General confirmed that the database was rigged to enable insurers to underpay out-of-network physicians, the release stated.

“It is important because it is just the latest in a series of successful suits against insurers who manipulate the claims processing system to underpay doctors,” said Alan E. Reider, JD, regulatory/legislative section editor for Ocular Surgery News, a sister publication of ORTHOSuperSite.com.

A separate-but-related agreement between UnitedHealth and the New York Attorney General called for replacing the faulty database with a more transparent one operated by FAIR Health, a research network led by Syracuse University, the release noted.

A later hearing in the U.S. District Court for the Southern District of New York will address the final approval of the settlement, the release stated.

“The court’s approval is an important step in finalizing a settlement that recognizes UnitedHealth’s flawed payment scheme resulted in significant damages to physicians who provided out-of-network care to patients enrolled with UnitedHealth,” AMA Immediate Past President Nancy H. Nielsen, MD, stated in the release. “Years of litigation and tireless advocacy from the AMA and organized medicine have exposed the industry-wide insurer scheme and paved the way for a more equitable way to set payments for out-of-network care.”