Practice News

Doctors to get $200 million in UnitedHealth settlement

A federal court judge has cleared the way for releasing payments in a 2009 settlement that ended the historic court challenge the AMA led against UnitedHealth Group. Nearly $200 million in awards will be disbursed to settle claims from physicians for 15 years of artificially low payments the insurer paid for out-of-network health services.

Spearheaded by the Litigation Center of the AMA and State Medical Societies, this decade-long legal battle exposed a fundamental conflict of interest at UnitedHealth. The Litigation Center's work with organized medicine, state regulators and U.S. senators succeeded at calling into question the system for paying out-of-network medical bills, which has been controlled completely by insurers.

"The truly lasting legacy of this court challenge will continue long after the last physician has received a share of the landmark settlement," AMA President Peter W. Carmel, MD, said in a news release. "UnitedHealth and other insurers will no longer be able to pull the wool over doctors' and patients' eyes when determining payment rates for out-of-network care."

In 2008 the AMA brought evidence of UnitedHealth's improper business practices to the attention of former New York Attorney General Andrew Cuomo, who confirmed the abuses in his own investigation. Under legal agreements with the attorney general, UnitedHealth and several other major insurers committed to meaningful reforms to the out-of-network payment system.

In addition, an independent database called FAIR Health was created to publically report the fair out-of-network rate for any given medical service.

"The AMA's stand against UnitedHealth shows that when doctors join together and enlist the help of organized medicine, the best outcome for patients and doctors can be achieved," Dr. Carmel said.

Visit the AMA's UnitedHealth settlement Web page for additional information about the settlement award distribution.

Establishing a cost-based practice fee schedule

An educational resource from the AMA can help physicians and their practice staff learn more about establishing their practice fee schedule based on what it actually costs to provide a service, rather than setting it up based on what a third-party payer or other entity wants to pay.

"Fee schedule analysis: Using your complete practice cost as a guide" outlines 12 steps to help physicians create their own unique practice fee schedule. The resource also provides an easy-to-complete spreadsheet that allows physicians to include additional markup percentages to account for profit, contributions to reserves and future capital expenditures.