(By William H. Maruca, Esq. – Posted with permission of the Allegheny County Medical Society )
A tentative settlement has been reached in a class action brought on behalf of a group of affected physicians against Blue Cross and Blue Shield plans which alleged that the plans engaged in certain misconduct that resulted in the denial or downcoding of physician claims. By now, you may have received a notice from the U.S. District Court for the Southern District of Florida about the proposed settlement of the case, known as Rick Love M.D., et al. v. Blue Cross and Blue Shield Association, et al. The Notice can be found at http://www.highmarkphysiciansettlement.com/documents/I003%20(Notice).pdf and contains detailed information about the suit and settlement.
The Love case started as a national class action which named all of the Blues plans and the national Blue Cross Blue Shield Association, and most of them reached a separate settlement earlier this year. Highmark and its affiliates Keystone Health Plan West, Highmark West Virginia (d/b/a/ Mountain State Blue Cross Blue Shield), and Parker Benefits, Inc. (d/b/a/ Super Blue HMO), have now agreed to similar terms, which are pending final court approval. You may be eligible to participate in both settlements. The settlement establishes a fund of nearly $10 Million and requires the plans to adopt certain business practice reforms to benefit the class of physicians covered in the suit.
Generally, all physicians, physician groups and physician organizations who provided services to any individual enrolled in or covered by a plan offered or administered by any Blue Cross Blue Shield affiliate (not just Highmark) from May 22, 1999 through November 19, 2007 may be eligible to participate in this settlement.
If you do not want to be a class member and participate in the proposed settlement, then you must send your written request postmarked no later than January 14, 2008. You may also file formal objections to the settlement by January 14, 2008. For detailed information and instructions, see the Notice.
If you want to claim a portion of the financial settlement, you must complete and submit a Claim Form no later than February 27, 2008. The claim form is included in the Notice.
You are not required to submit a Claim Form to remain in the class. If you want to remain in the class, but do not want to submit a claim, you do not need to do anything. You will still be a member of the class if the settlement is approved unless you exclude yourself by following the Opt-Out procedures.
By participating in the settlement, physicians agree to the following:
Settlement Fund. The Plans will establish a settlement fund of $9,958,968, select a Settlement Administrator, and distribute cash settlements. A portion of the fund will be reserved for retired physicians based on the relative proportion of retired physicians who opt in, and active physicians will divide the remaining fund based on their level of payment received from the Plans in three tiers:
(x) Physicians who received less than $5,000 from Plans during 2004-2006 will be entitled to the “Base Amount” defined in the settlement;
(y) Physicians who received between $5,000 and $50,000 from Plans during 2004-2006 will be entitled to five times the Base Amount;
(z) Physicians who received more than $50,000 from Plans during 2004-2006 will be entitled to ten times the Base Amount.
The Base Amount will be calculated in a manner so that the payouts meet these ratios after the opt-in period ends and the number of physicians in each category is known. Note that the eligible class may include as many as 900,000 physicians, and if they all opt in, simple math indicates that many will receive only nominal payments.
Business Practices. The Plans agree to certain reforms, to be implemented for participating physicians. The Plans reserve the right not to apply these reforms to non-participating physicians, but it is premature to know whether Highmark and its affiliates will operate a two-tiered system favoring those physicians who join in the settlement or apply these changes across the board. Further, these changes will be implemented over time, and some may not begin until after all appeals are completed. A number of interested involved parties in other Blue Cross Blue Shield class actions are expected to appeal. The business practices include:
• Disclosure of fee schedules to Participating Physicians, subject to confidentiality.
• Limits on services and supplies requiring precertification.
• Disclosure of “significant edits” (automatic adjustments to or denials of CPT or HCPCS codes)
• No requirement to routinely submit clinical information except for unlisted codes, modifier -22 (which indicates that services provided were greater than those usually required), and other limited categories that must be disclosed by Plans.
• Disclosure of limited code combinations that are not appropriately reported together.
• Establishment of a 12-member physician advisory committee.
• Adoption of a new dispute resolution process and external review procedure.
• Only physicians may make noncoverage or lack of medical necessity determinations; Nurses can approve or make favorable coverage or medical necessity rulings.
• Physicians will be entitled to review by a physician in the same specialty in appeals.
• Time limits on credentialing decisions
• Restrictions on the use of all-products clauses.
• Plans may not reduce fees more than once per calendar year.
• Prompt payment of clean claims, phasing in from 30 to 15 days turnaround time, with mandatory interest at 8% for late payments.
• No automatic downcoding of E&M codes.
• No overpayment recovery beyond 18 months after payment except for fraud.
• No withdrawal of procedure approval/medical necessity except where there is fraud, missing information or changes in conditions.
• No gag clauses.
• Expanded arbitration provisions with additional due process requirements.
These business practice changes are described in more detail in the settlement itself, which can be read at http://www.highmarkphysiciansettlement.com/documents/Love%20v%20%20Blue%20Cross%20Settlement%20Agreement-Signed.pdf
Release. By joining in the settlement, physicians agree to give up any and all claims they may have against the Plans, their affiliates and agents, arising out of any of the types of misconduct alleged in the class action (i.e., improper processing of claims, medical necessity determinations, payment denials, delays or reductions), as well as any other disputes involving claims for payment. This is an extremely broad release, and if you have or think you may have any claims against Highmark or its affiliates, you should consult your attorney as soon as possible to determine whether you should opt-out of the settlement.
There will be a final Settlement Hearing – also known as the Fairness Hearing – on February 11, 2008.
More information is available at http://www.highmarkphysiciansettlement.com/
If you would like additional guidance on whether it is in your best interest to participate in the Settlement or opt-out, you should contact your healthcare attorney.
William H. Maruca is a healthcare partner with the Pittsburgh office of the law firm Fox Rothschild LLP. For more infomration, please contact Mr. Maruca at 412-394-5575.