Florida Supreme Court rules that out-of-network doctors can sue HMO

In a separate case, an appeals court said an out-of-network emergency physician could sue insurers for underpayments. Both Florida lawsuits seek class-action status.

By Amy Lynn Sorrel, AMNews staff. Nov. 20, 2006.

Florida physicians won a pair of legal victories in lawsuits that could have a significant impact on HMOs' payment practices to out-of-network and in-network physicians. The state's Supreme Court and an appellate court in October issued rulings within one day of each other that allow doctors in two cases to sue several health plans for slow or reduced reimbursements under the state's payment laws.

Physicians say the decisions give teeth to statutes that are meant to ensure that doctors get paid fairly and on time for their services. They also say the ruling gives doctors more leverage in negotiating with insurers for reimbursements.

"It levels the playing field because it says to doctors that these rights that are provided to you are not meaningless," said Jeff Scott, associate general counsel of the Florida Medical Assn., which filed friend-of-the-court briefs in both cases. The American Medical Association/State Medical Societies Litigation Center and other medical groups also joined in the court briefs.

"Without an ability to enforce [the laws], what good do they do?" Scott said.

After five years, the Florida Supreme Court on Oct. 19 unanimously ruled in Westside EKG Associates v. Foundation Health that the out-of-network cardiologists who sued are considered third-party beneficiaries of the HMOs' contracts with members. Therefore, judges said, Westside can go forward with a suit accusing Foundation Health, Humana and BlueCross BlueShield of Florida of breaching those contracts. The doctors say the insurers violated prompt-pay laws by delaying or denying claims.