The issue in this case was whether insurance companies can compel arbitration of physicians' claims that the insurers violated Missouri antitrust laws by conspiring to pay reduced fees to physicians and physician groups with whom they had entered into provider agreements.
Although the AMA supports arbitration clauses in certain contexts, it believes that the arbitration provisions at issue in this case are inapplicable and unenforceable. Among other things, the parties did not agree to arbitrate the antitrust dispute at issue.
The plaintiff physician groups initiated a class action lawsuit against insurance companies alleging an antitrust conspiracy for their reducing payments to the physicians on their provider panels.
The insurance companies moved to compel arbitration, based on arbitration clauses in their provider agreements with plaintiffs. The trial court found the arbitration clauses unenforceable and denied the motions to compel arbitration. It found that the requested arbitration would effectively immunize the insurance companies from the type of claims brought by plaintiffs and prevent the enforcement of plaintiffs' antitrust claims. Defendants appealed.
Litigation Center involvement
The Litigation Center along with the Missouri State Medical Association filed a motion in the Missouri Court of Appeals to submit an amicus curiae brief to support the plaintiffs. The brief argued that the arbitration clauses are unconscionable because they were created and imposed on a take-it-or-leave-it basis, and contain impermissible limitation of damages provisions. The Court of Appeals denied leave to file the amicus brief.
Also under Managed Care Payments and Payment Issues (for physicians)
The issue in this case is whether an arbitrator can authorize a class arbitration without a specific provision in the arbitration agreement that allows such action.
The AMA supports lawsuits that seek redress from insurers who engage in inappropriate or inaccurate downcoding and/or recoding practices.
Dr. John Sutter signed a participation contract with Oxford Health Plans. This contract required as follows:
"No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration ... pursuant to the Rules of the American Arbitration Association."
Dr. Sutter filed an arbitration claim, alleging that Oxford had systematically bundled, downcoded, and delayed payments for his services and the services of approximately 20,000 other physicians in its network. He requested that the claim be tried on a class basis. After considering the scope of the arbitration clause, the arbitrator inferred an intent within that clause to allow class arbitration, and he ordered that the arbitration proceed as a class action.
Oxford then sued in the United States District Court of New Jersey to have the class arbitration award vacated, and the case bounced back and forth between the District Court and the Third Circuit Court of Appeals. On April 3, 2012, the Third Circuit found that the arbitrator had interpreted the arbitration clause reasonably and was entitled to some deference in making that interpretation. It affirmed the District Court order denying Oxford's motion to vacate the arbitration award.
Oxford appealed to the United States Supreme Court. Oral argument was heard on March 25, 2013.
Meanwhile, the arbitration remains pending, as the arbitratorhas not yet reached the merits of the case.
Litigation Center involvement
The Litigation Center, along with the Medical Society of New Jersey, filed an amicus brief in support of Dr. Sutter.