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The ISMA supports federal lawsuit against UnitedHealthcare
e-Reports, Feb. 10, 2014
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The ISMA and several other specialty, state, county and national medical associations filed an amicus curiae (“friend of the court”) brief Dec. 23 in support of a federal lawsuit against UnitedHealthcare (UHC). The lawsuit stems from unilateral termination letters sent by UHC in October to physicians in the Medicare Advantage (MA) network. UHC is the nation’s largest MA insurer.

The letters stated, “Given the significant changes and pressures in the healthcare environment, we have undertaken a review of our network and are making changes in its composition. As a result, UnitedHealthcare is amending your [Physician Contract] to discontinue your participation in the Medicare Advantage network effective on February 1, 2014.” The letters also provided appeal rights.

The ISMA received many calls from physician practices about these letters and took immediate action, including contacting the Indiana Department of Insurance (IDOI), the Centers for Medicare & Medicaid Services, AARP, and UHC. (See Nov. 12, and Dec. 9, 2013, issues for details.)

“The IDOI remains supportive, but has limited options because MA is regulated at the federal level,” said Julie Reed, ISMA general counsel. Unsatisfied with the responses from UHC and CMS, the ISMA joined the federal lawsuit against UHC.

More about the lawsuit
In November, two Connecticut county medical societies filed a lawsuit in Connecticut federal court seeking to prevent the network terminations. In December, the court granted a preliminary injunction, indicating appropriate contracting standards had not been met and terminations would have to be stayed pending appeal and arbitration procedures. UHC appealed the decision, asking the court to lift the preliminary injunction.

On appeal, multiple medical associations, including the ISMA, became involved and filed an amicus brief, which the court permitted. A hearing was held Jan. 21 at the Second Circuit Court of Appeals in New York. The court ordered the parties to participate in mediation, which is ongoing.

In Connecticut only
In the complaint filed in the Connecticut federal court, the two Connecticut county medical societies asserted UHC terminations violated the terms of the UHC MA contracts and UHC also acted in bad faith. The judge agreed and, following an oral argument by both parties, granted a preliminary injunction that specifically prohibits UHC from:

  • Terminating the contracts of approximately 2,200 Conn. physicians from their MA program on Feb. 1
  • Notifying Conn. MA patients that those providers would no longer be in the MA network as of Feb. 1
  • Removing or leaving those Conn. physicians out of its 2014 MA Network directory

In its order, the court recognized terminations would have a negative impact on patient/physician relationships, lead to “loss of goodwill and reputational harm” to those physicians, and hinder their “ability to compete in the market for provision of Medicare services.”

About the amicus briefs
The amicus briefs filed with the Second Circuit Court of Appeals in New York provide support for why the court should continue the injunction. The first one, filed by 20 specialty, state, and national medical associations, argues that the injunction promotes what is best for the public and also details how detrimental the terminations would be for both patients and physicians.

“[T]he public’s interest lies in ensuring that United’s Medicare Advantage network has sufficient physicians to serve its Connecticut Medicare Advantage patients and in ensuring that there is no disruption in care for these patients.”

The second amicus brief, filed on behalf of 33 organizations including the ISMA, furthers those same arguments.

“There can be no doubt that [UHC]’s February 1, 2014[,] terminations will disrupt longstanding physician-patient relationships for elderly and disabled patients whose care is enhanced by continuity of care.”

Reed noted, “The brief emphasizes that because the potential harm to physicians and their patients greatly outweighs any claimed administrative burden on UHC, the injunction should be maintained.”

Continue reading ISMA Reports for more details as this lawsuit progresses through the courts.

Language from the lawsuit:
United “is shifting the financial burdens imposed by the Affordable Care Act from itself, a multi-billion dollar company, to the providers and patients, all with the aim of maximizing revenues. Such a bad faith response, which undermines clear legislative policies and is being done solely for the sake of profits, cannot be condoned.”
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