The U.S. District Court for the Southern District of New York has granted the preliminary awarding of $350 million toward resolving a class-action lawsuit against UnitedHealth Group. However, no distribution of the settlement fund can take place until after final court approval has been obtained following a “fairness” hearing.

Last March, the AMA and other state medical associations joined several other plaintiffs in alleging that UnitedHealth Group colluded to underpay physicians for out-of-network medical services.

The suit charged that insurer’s long-term use of the flawed Ingenix database, a unit of
UnitedHealth Group, shortchanged reimbursements to doctors.

“The court’s approval is an important step in finalizing a settlement that recognizes UnitedHealth’s flawed payment scheme resulted in significant damages to physicians who provided out-of-network care to patients enrolled with UnitedHealth,” said AMA Immediate Past President Nancy Nielsen, M.D.

“Years of litigation and tireless advocacy from the AMA and organized medicine have exposed the industry-wide insurer scheme and paved the way for a more equitable way to set payments for out-of-network care.”

A final approval hearing by the court has not yet been set. Physicians affected by the lawsuit can expect to receive detailed terms of the proposed settlement, including information about filing claims for reimbursement from the $350 million settlement fund.