We Shall Fight Them on the Beaches

Psychiatric TimesPsychiatric Times Vol 21 No 11
Volume 21
Issue 11

Settlements by two insurance companies in the RICO lawsuit could have an major impact on psychiatry practices.

Try saying managed care and racketeering in the same sentence. Feels good, doesn't it?

In May 2000 the entire class of 950,000 U.S. physicians sued 10 managed care companies under the RICO (Racketeer Influenced Corrupt Organizations) Act, accusing them of conspiracy, racketeering and fraud. These 10 companies--Aetna; Anthem; CIGNA; Coventry; HealthNet; Humana; Prudential PacifiCare; United and Wellpoint--represent 90% of the managed care industry. Subsequently, over 60 Blue Cross companies have been sued in a separate action. Rather than face RICO charges in court, Aetna and CIGNA have settled.

Make no mistake: This suit and these settlements represent a huge victory for us. For the first time, we have been able to fight back against the egregious incursions of managed care into the practice of medicine. We have struck a huge blow that helps us protect our patients and our ability to give them the care they need.

What do these settlements mean to us as practicing psychiatrists?

  • Changes in business practices worth over $800 million over the next four years. This is the major victory of the settlement and the true goal of the RICO class action suit. Central among these are the adoption of a definition of medical necessity based on the American Medical Association definition, no automatic downcoding and bundling of current procedural terminology (CPT) codes, protection for nonparticipating physicians, and no mandatory Health Insurance and Portability and Accountability Act of 1996 (HIPAA) compliance.

  • Enforcement of the terms of the settlement will take place under the scrutiny of federal court, and disputes regarding medical necessity, billing or general compliance with the settlements will be resolved swiftly and definitively. The participating medical societies and the RICO attorneys are available to assist physicians in this process.

  • Financial damages are available to all physicians; all physicians are party to the class action suit by default, even if you never filed a claim with CIGNA. Physicians can simply claim their share of a $30 million fund, or submit claims left unpaid by CIGNA between August 1990 and September 2003.

Forty medical societies are party to the settlement, including four psychiatric societies: American Association of Practicing Psychiatrists, American Psychoanalytic Association, Massachusetts Psychiatric Society and the Psychiatric Society of Delaware. These four societies have stepped forward to work closely with the RICO attorneys to make certain that they understand how managed care tactics have harmed psychiatrists in their efforts to deliver quality care to their patients.

Your share of the $30 million fund could be as low as $40. However, you can make a difference:

  • Donate your share of the CIGNA settlement to one of the organizations representing psychiatry. If all U.S. psychiatrists were to donate their share, we could raise close to $2 million to continue our fight.

  • File disputes if either company unduly interferes with your clinical practice. (For claim forms or more information, visit <www.hmosettlements.com> or contact one of the four aforementioned psychiatric associations.)

Now the ball really is in our court, and it is up to each of us not to drop it. We have the tools we need to protect our patients--but we must use them. We have established a major beachhead. Now the real battle begins.

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