Wednesday, March 6, 2013
This Week's News
This Week's News
Insurer's payment practices contested in Supreme Court case; AMA files brief
A case before the Supreme Court of the United States will determine whether thousands of physicians can bring a class arbitration against a health insurer that has wrongfully underpaid them for more than a decade.
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 Thursday, shining light on the importance of allowing physicians to file class arbitrations against insurers.
Sutter v. Oxford Health Plans dates back to September 2003 when New Jersey pediatrician John Sutter, MD, alleged that Oxford Health Plans had systematically bundled, downcoded and delayed payments for his services and those of 20,000 other physicians in its network.
Because the insurer's contracts with physicians only permit arbitration for resolving disputes, Dr. Sutter requested that his claim would be filed as a class arbitration to address the widespread payment issue.
While the arbitrator and other legal opinions have deemed the class arbitration acceptable under the terms of the contract, Oxford Health Plans has appealed the case all the way to the U.S. Supreme Court.
"Since health insurers like Oxford know that arbitration is a seldom-used and ineffective way of bringing individual claims, they can violate their contracts with doctors with impunity, underpaying doctors and leaving them with no effective means to challenge such underpayments," the brief states.
The Litigation Center and MSNJ point out that the insurer has undoubtedly spent more in legal fees to prevent any class arbitration than it would have spent in settling the claims. The brief also argues that without such broad-scale arbitration, physicians would have no means of challenging an insurer's unfair payment practices.
"[I]t is clear that Oxford would rather pay hundreds of claims individually in arbitration and continue its practices unabated so that it would never have to stop its wrongful—and lucrative—conduct," the brief states.
Visit the Litigation Center's Web page on arbitration cases to read more.