AMA Wire

Wednesday, June 12, 2013

This Week's News

Supreme Court sides with doctors in dispute over insurer's pay practices

Supreme Court sides with doctors in dispute over insurers pay practices

A decision Monday by the Supreme Court of the United States will allow individual physicians to come together as a group to fight unfair business practices of large health insurance companies.

The ruling in Sutter v. Oxford Health Plans, a dispute between the East Coast insurer and New Jersey pediatrician John Sutter, MD, that dates back to 2003, means that thousands of physicians will be able to use class arbitration against an insurer that has underpaid them for more than a decade.

"Without this broad-scale arbitration, physicians would have no practical means of challenging a health insurer's unfair payment practices," AMA President Jeremy A. Lazarus, MD, said in a news release.

Dr. Sutter alleged in this case that Oxford Health Plans had systematically bundled, downcoded and delayed payments for his services and those of 20,000 other physicians in its network. Oxford Health Plans had challenged legal decisions supporting class arbitration of the dispute, appealing the case all the way to the U.S. Supreme Court.

The Litigation Center of the AMA and State Medical Societies and the Medical Society of New Jersey (MSNJ) filed a friend-of-the-court brief, which argued that health insurers such as Oxford know that forcing physicians to individually arbitrate their disputes works to the insurers’ advantage by allowing contract violations and underpayments to persist and limiting the means by which physicians can effectively challenge unfair business practices.

"It is a sad commentary that it took a decade for Dr. Sutter and other New Jersey physicians to exercise the dispute mechanism allowed by their contracts," MSNJ General Counsel Melinda Martinson said. "A timely class-arbitration would have allowed them to have their payment disputes resolved more expeditiously and cost-effectively. The decision is welcome news to physicians in New Jersey and all who are concerned with the reducing the cost of medicine in this country."

The court's ruling in favor of physicians gives a boost to the medical profession's efforts to address unfair corporate policies of large health insurers that are harmful to patients and physicians.