In 2002, the NC Medical Society sued in state court alleging that United’s practices – improper coding, bundling, downcoding, edits, improper use of guidelines, and poor claims resolution – breached contracts with physicians (North Carolina Medical Society v. UnitedHealth Group, Inc., et al.). United removed this case (and similar cases brought by state medical associations and physicians in several other states) to federal court in New York, asserting that the federal courts had jurisdiction over claims covered by ERISA.
At the time these state-based cases were filed, another federal case (In re Managed Care Litigation) was pending in Florida against United based on the Racketeer Influenced and Corrupt Organization Act (RICO). Our state cases were put on hold until the Florida case was resolved in 2007. Thereafter, United convinced the court to dismiss all of the state-based cases. NCMS felt these claims were too important to our membership and decided to appeal that decision. On Tuesday, July 6, 2010, the 11th Circuit Court of Appeals ruled that our state-based cases were not precluded by the judgment in the RCIO case and remanded them to the federal district court for further proceedings.
“This is a major milestone in the corridors of justice for the NCMS,” EVP, CEO Robert W. Seligson said. “It is anticipated that if the current suits are successful, it will bring major business practice changes by United, which have been a long time in coming.”
Seligson cited diligence on the part of the NCMS, Medical Society of the State of New York, Connecticut State Medical Society and the Tennessee Medical Association as helping to address the unfair business practices.
“It is critical that steps continue to be taken to keep such practices from occurring,” Seligson said. “It will require the support of NCMS members and their colleagues to provide clear examples of these abuses so that we can seek legal relief for practices. We are committed to eliminating unfair business practices by managed care entities.”
The NCMS will keep you apprised of developments in this important case.