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Blue Cross settles with physicians

From Times Staff Reports and the Associated Press

A group of managed-healthcare companies have reached a $128-million settlement in a class-action lawsuit filed by about 900,000 physicians over alleged unfair payment practices, both sides confirmed Friday.

Under the settlement, 23 Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Assn. will pay the money to a fund. The physicians can make a claim or select a charity to receive the money.

The deal does not include the 3 million Californians covered under Blue Shield of California, which remains in negotiations with doctors in the lawsuit, a lawyer involved in the case said.

The plans also will pay legal fees determined by the courts of as much as $49 million, said Michael Pope, a spokesman for the companies.

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“The Blue Cross plans have always worked well with their physicians,” Pope said.

In May 2003, the physicians filed a lawsuit in Miami against the companies. They contended that they were systematically cheated by insurance companies that programmed computers to pay for less intensive services than were actually provided.

The settlement must be approved by U.S. District Judge Federico A. Moreno, both sides said.

Practice changes the plans have agreed to include implementing a definition of medical necessity that ensures patients are entitled to get medically necessary care as determined by a doctor and using clinical guidelines that are based on credible scientific evidence when making medical necessity determinations, according to a statement by Archie Lamb, an attorney for the physicians.

“This settlement marks the end of an 8-year journey where physicians have sought to alter their relationships with the insurance companies to the benefit of their patients,” Lamb said.

He said the physicians had filed lawsuits against 47 insurance companies since December 1999. The cases were dismissed for three companies and the rest have been settled, he said.


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