Judge drops last holdout HMOs from landmark class-action lawsuit

Physicians are considering an appeal. Despite the dismissal, doctors say the case, which involved settlements with other companies, has forced the industry to change.

By Amy Lynn Sorrel, AMNews staff. July 10, 2006.

Although a federal judge in June tossed out claims of unfair payment practices that more than 700,000 physicians brought against UnitedHealth Group and Coventry Healthcare, doctors said the long-running battle with the managed care organizations is far from over.

The judge's order in favor of the last two defendants in a class-action lawsuit that began in 1999 could leave the door open to future litigation against United and Coventry, according to the doctors' co-lead counsel, Archie Lamb.

Unlike earlier settlement agreements by other health plans initially named in the nationwide class-action lawsuit that accused 10 health plans of conspiring to reduce or deny reimbursement to the nation's doctors, United and Coventry "did not receive the global protection a court order does in terms of extinguishing lawsuits," Lamb said.

The federal racketeering lawsuit resulted from the consolidation of about 50 individual state and federal actions doctors and state medical societies filed across the country. Various claims accused health plans of breaking contracts with doctors and violating state prompt-pay laws, while taking part in a larger scheme to defraud physicians.

Doctors are considering an appeal to the 11th U.S. Circuit Court of Appeals. As part of their appeal, doctors are "exploring asking the judge for remand of our ... cases brought originally in state court, so we can continue to address the issues of unfair business practices," said Matthew C. Katz, executive director of the Connecticut State Medical Society.