Court dismisses case against holdouts in class-action suit

Doctors are considering an appeal, and pursuing claims against United in state courts.

By Amy Lynn Sorrel, AMNews staff. July 9, 2007.

A federal appeals court in June threw out doctors' claims against United Healthcare and Coventry Health Care for alleged improper payment practices. But that is not stopping physicians from continuing their fight against insurers.

A unanimous three-judge panel of the 11th U.S. Circuit Court of Appeals upheld a 2006 trial court ruling that found "insufficient evidence" that the two health plans, along with eight others, conspired to use software to systematically reduce or deny reimbursements to doctors in violation of the federal Racketeer Influenced and Corrupt Organizations Act.

The decision, though, leaves the door open for doctors to pursue their original and future claims against United and Coventry in state court, according to physicians' co-lead counsel Edith Kallas.

The federal class-action lawsuit brought nearly a decade ago grew out of the consolidation of individual state and federal actions that 700,000 doctors and various state medical associations filed against 10 major insurers. Among the state claims, doctors accused the health plans of breaching their contracts with physicians and violating state prompt-pay laws as part of a larger conspiracy to defraud physicians.

Earlier settlements with other insurers named in the case prevent doctors from suing those health plans on the issue in state or federal court. But that protection does not apply to United and Coventry, Kallas said.

Doctors are considering an appeal to the full bench of the 11th Circuit. Meanwhile, they have asked the U.S. District Court for the Southern District of Florida in Miami to hand back their cases "so we can address the issues of unfair business practices and contracting with respect to state law," said Matthew Katz, executive director of the Connecticut State Medical Society.