Connecticut M.D.s Turn to Court To Redress MCO Problems

With federal efforts to enact a law protecting patients from some managed care practices gridlocked on Capitol Hill, angry and frustrated physicians are turning with increasing frequency to the courts to remedy the problems. One of the latest skirmishes in this legal battle is playing out in Connecticut, where the state medical society has filed suits against six of the state’s largest managed care plans.

The Connecticut State Medical Society (CSMS) is charging these insurers with breaching contracts with physicians and engaging in deceptive and improper practices, one disturbing result of which is that these physicians are prevented from delivering optimal care to patients insured by the companies.

Specifically, the CSMS alleges that the managed care firms have routinely used illegal means to avoid compensating physicians as required by the terms of their contracts. Among the tactics the medical society alleges in its suit are “downcoding, bundling, or refusing to pay a modifier on claims for service; arbitrarily overruling a physician’s ‘medical necessity’ determinations without conducting a proper analysis or review; failing to pay physicians in a timely fashion; failing to provide a proper explanation when a claim has been denied payment; failing to pay interest on claims according to Connecticut’s Prompt Payment Law; failing to properly staff clinical and utilization departments. . . . ; and exploiting the parties’ unequal bargaining power to force physicians to enter into one-sided, nonnegotiable contracts that infringe upon the physician/patient relationship.”

The CSMS, which filed its suit on February 14, is asking the court for injunctive relief on behalf of all the society’s members. Several individual physicians have also filed parallel suits against the same six companies in Connecticut—Aetna, Oxford, Cigna, ConnectiCare, Anthem Blue Cross/Blue Shield, and Physician Health Service (PHS).

“Our message, quite simply, is that enough is enough,” said CSMS President Donald Timmerman, M.D., in a statement explaining the reason the organization turned to the courts. Insurance company “bureaucrats” make medical care decisions “in order to satisfy their shareholders,” not to deliver the best care possible to the people they insure, he suggested.

To reverse this situation, he said, the CSMS filed the lawsuits “to put an end to the untenable choice many doctors face—agreeing to onerous, take-it-or-leave-it contracts with insurance companies or being forced to no longer treat their patients” who are insured through these companies.

The suit has the backing of the Connecticut attorney general’s office.

Psychiatrist Al Herzog, M.D., a past speaker of the APA Assembly, is president-elect of the CSMS. Herzog told Psychiatric News that the group’s physician members had reached their tolerance limit for “the pattern of managed care practices that adversely affects the way we care for patients and the way patients are able to get medical care. The companies may not have intended it, but it’s clear that they are managing costs, not care.”

Herzog emphasized that the medical society is not suing for monetary damages, but for injunctive relief. The CSMS hopes the court listens to its arguments and realizes that it needs to step in and order the managed care industry to cease the harmful practices that have become a part of the companies’ business models, he said.

The AMA quickly endorsed the Connecticut effort, with D. Ted Lewers, M.D., chair of the AMA Board of Trustees, commenting that the CSMS lawsuit “should provide a clear signal that health insurers must address the legitimate concerns of physicians with more than just rhetoric.”

A spokesperson for the Connecticut Association of Health Plans, which represents HMOs, took issue with the claims the CSMS asserted in the suit. “Connecticut has probably the most advanced patient protection statutes in the country,” said Keith Stover in a New York Times interview. “The claims are, at best, hyperbolic, and, at worst, they’re just disingenuous.” He did not respond to several requests for comment from Psychiatric News.

Aetna said it is “surprised and disappointed” that the physicians resorted to a legal strategy to resolve differences in light of recent discussions between the company and the CSMS to address concerns the physicians have, according to a press release issued the day the suit was filed. This suit, the company stated, appears “similar to claims made in purported class-action suits filed around the country since late 1999. These complaints seek to engage in a policy quarrel with the managed care system. The U.S. Supreme Court recognized in a unanimous decision last June (Pegram v. Herdrich) that for over 27 years, Congress has promoted the formation of HMOs. The Court emphasized that the choices inherent in the managed care system properly should be made by legislatures and admonished the courts not to get involved in these essentially legislative actions.”

Timmerman’s complete statement on the CSMS lawsuit is available on the Web at www.csms.org/news-items.html. Aetna’s statement opposing the lawsuit is posted at www.aetna.com/news/2001/pr_20010214.htm. ▪