MANAGED CARE February 2005. ©MediMedia USA
Two roads diverged in a lawsuit and Aetna and Cigna took the one less traveled by.
Ok, Robert Frost probably would not find much to inspire him in a lawsuit that about 600,000 physicians have filed against some of the biggest health plans in the country, but maybe John Grisham would. And both sides are definitely seeking poetic justice, especially in light of the U.S. Supreme Court's refusal last month to hear an appeal by the health plans to stop the class-action suit.
The court's action, or inaction, means that the 11th Circuit U.S. Court of Appeals ruling last September will stand. And the lower court said that the class-action suit can proceed.
The health plans had argued that the individual contracts the physicians had signed were so varied that it made a class action not practicable.
The physicians say that from 1990 to 2002 insurers programmed their computers so that the machines automatically underpaid doctors for services.
Named in the suit are Humana, PacifiCare, UnitedHealthcare, WellPoint, Anthem, and Health Net.
Aetna and Cigna had also been named but decided to settle out of court in 2003 for about $1.1 billion.
Yes, that seems steep, even by the standards of American industry. But now some suggest that a court ruling against the remaining HMOs would be even more costly.
The Blue Cross and Blue Shield Association, which faces similar provider lawsuits, tells Bloomberg News that the top court's decision "places heavy pressure" on the six health plans to follow Aetna and Cigna's lead and settle out of court "rather than roll the dice and possibly incur potentially crippling — even bankrupting — damages awards."
Meanwhile, both sides have not been idle while waiting for the Supreme Court's decision. They have been preparing for trial, and now they have a tentative start date.
U.S. District Judge Federico Moreno in Miami says that he will hear the case on Sept. 6. He had originally planned to begin in March. Stay tuned.