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Insurers Lose Bid to End Suit by Doctors

June 01, 2005|From Bloomberg News

UnitedHealth Group Inc., WellPoint Inc. and five other health insurers Tuesday lost a U.S. Supreme Court bid to derail a class-action lawsuit that claimed they systematically underpaid 600,000 doctors.

For the second time this year, the justices rebuffed an industry appeal in the case. The high court turned aside the latest petition without comment.

Billions of dollars may be at stake in the case, which is being pressed in federal court in Miami. Insurers Aetna Inc. and Cigna Corp. have settled their portion of the doctors' lawsuit for a total of $310 million.

In their appeal, the insurers argued that a federal trial judge was wrong to allow some legal claims against the insurers to go to trial even though other claims were subject to arbitration. The allegations cleared for trial include conspiracy to engage in racketeering.

The Atlanta-based 11th U.S. Circuit Court of Appeals upheld the trial court ruling.

The providers accuse the insurers of developing processing software that automatically "downcodes" claims submitted by doctors to reduce the reimbursement rate. Lawyers for the doctors say they intend to seek billions of dollars in damages for claims that date back to 1990.

The lawsuit also names units of Humana Inc., PacifiCare Health Systems Inc., Prudential Financial Inc., Health Net Inc. and Coventry Health Care Inc.

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