Doctors settle suit with Blue Cross.The California Medical Association has reached a $4.2 million settlement with Blue Cross of California, ending one of the first class-action lawsuits brought against insurers stemming from their disputes with doctors over the past decade. The settlement covers more than 25,000 doctors and podiatrists who the medical association claims had their reimbursement rates arbitrarily reduced in the mid 1990s at the same time the insurer's parent, WellPoint Health Networks Inc., was making big profits. "The amount per doctor is quite trivial but the principle is important--it's not just take it or leave it now," said Dr. Jack Lewin, chief executive of the medical association. "I do believe it will lead to a better relationship between doctors and health plans." The settlement, given preliminary approval Sept. 30 by San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden Superior Court Judge James L. Warren, specifically covers doctors who were members of either the medical association or the California Podiatric Medical Association and contracted with the insurer from 1993 to 1995. The individual settlement amounts could total just a few hundred dollars if all eligible doctors submit claims, but Lewin said the case was legally important because the Superior Court lawsuit survived a challenge brought by WellPoint under the Employee Retirement Income Security Act The Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 et seq. (1974), is a federal law that sets minimum standards for most voluntarily established Pension and health plans in private industry to provide protection for individuals enrolled in these plans. of 1974. ERISA See Employee Retirement Income Security Act. ERISA See Employee Retirement Income Security Act (ERISA). regulates employee benefit plans, and HMOs have often successfully argued that under the federal act they are immune from actions brought against them in state court. Ken Ferber, a WellPoint spokesman, said that the company agreed to settle the case to help improve its relationship with doctors, but he also noted the settlement was just a fraction of the $86 million sought by the doctors. "We felt this was the best way to accommodate them," he said. The settlement comes as the CMA CMA - Concert Multithread Architecture from DEC. and medical associations in four other states pursue a larger federal class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax against WellPoint, PacifiCare Health Systems PacifiCare Health Systems (former NYSE: PHS) was a Fortune 500 healthcare company based in Cypress, California. It was acquired by UnitedHealth Group (NYSE: UNH) in late 2005, which continues to market health plans under the PacifiCare name. Inc., Health Net Inc. and other health plans. That lawsuit alleges the health plans violated the federal Racketeer Influenced and Corrupt Organization Act (RICO RICO n. . ) by conspiring to defraud To make a Misrepresentation of an existing material fact, knowing it to be false or making it recklessly without regard to whether it is true or false, intending for someone to rely on the misrepresentation and under circumstances in which such person does rely on it to his or doctors and violate their contracts. Aetna Inc. has reached a preliminary agreement to settle its part of the case by paying doctors $100 million, improving its billing procedures and make it easier for them to get approvals for patient treatments. The court must approve the agreement. Lewin said the deal on the state lawsuit did not necessarily presage an agreement with WellPoint in the federal case, while Ferber said the two cases were not related. |
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