Special E-Mail Bulletin
October 2001
Class Action Suit Against CIGNA
Special E-Mail Bulletin
Hi, everyone.
I've written to you several times in the past regarding the on-going problems providers are having with third party payors that downcode, delay, or deny payments. Here's information on a class-action lawsuit against CIGNA that's moving through the court system with surprising speed.
This is from the October 8, 2001 issue of AMNews.
Gil Weber
Suit against HMO gets class action status
Physicians throughout the country could benefit from a lawsuit against CIGNA now moving through an Illinois court. But there are still legal hurdles to overcome.
By Tanya Albert, AMNews staff. Oct. 8, 2001.
While the much-reported lawsuits that physicians filed against the nation's largest HMOs slowly wind through federal court in Miami, a little-known lawsuit in an Illinois court has been quietly making big strides.
The suit didn't get bumped to federal court and tossed in with the dozens of suits in Miami. Instead, a Madison County, Ill., judge earlier this year certified the contract case that two physicians filed against CIGNA as a class action for the entire nation.
The ruling means that several hundred thousand physicians who had contracts with CIGNA have a stake in the case's outcome.
"This is a very significant case because it has implications nationwide," said AMA Trustee and Secretary-Treasurer Donald J. Palmisano, MD, "This is the only case in the country that has been certified as a nationwide class action."
Alton, Ill., otolaryngologist Timothy N. Kaiser, MD, and Irving, Texas, pediatrician Suzanne LeBel Corrigan, MD, filed suit in May 2000 against CIGNA in Madison County -- along the Mississippi River near St. Louis. By design, the case deals with a very simple contract claim. "The problems that occurred are well-known to every physician: Dropped codes, downcoding, bundling," Dr. Kaiser said. "There were constant reimbursement difficulties. I simply got sick and tired of it."
The suit, Kaiser v. CIGNA, accuses the health plan of bundling and downcoding CPT codes. The contracts physicians signed don't address bundling or downcoding, according to the lawsuit. Consequently, the suit claims, CIGNA has breached their contract. "We have a very simple contract claim: Pay us for what we do," said Dr. Kaiser's attorney, Judy L. Cates.
By keeping it basic, attorneys for Dr. Kaiser and Dr. Corrigan hoped to keep the case out of federal court. They thought it would move through the system more quickly in state court.
Other lawsuits filed by physicians that use the Employee Retirement Income Security Act of 1974 and the Racketeering and Influence Corrupt Organizations act were filed in federal court and sent to one judge in Miami for pretrial motions. The judge there has not yet ruled on the request for class action status.
CIGNA's response
In a statement, CIGNA executives said they did not think the two physicians' suit should have been classified as a class action. And they said the judge's March decision to let the case go forward as a class action didn't mean there was any truth to the physicians' allegations.
"We believe we have fully honored our PPO contracts with the physicians and that the underlying legal claims in this suit are without merit," the statement read. "We will oppose those claims vigorously."
Among CIGNA's first action to oppose the claims was filing a complaint against Dr. Kaiser and about a half-dozen hospitals in federal court in Chicago rather than the state court in Madison County.
The complaint in the U.S. District Court for the Northern District of Illinois Eastern Division says the case in state court shouldn't go forward as a class action because of arbitration clauses in contracts that require physicians and others to work out problems with the health plan first. CIGNA asks the federal court to allow the health plan to arbitrate with its physicians and providers who have arbitration clauses in their contracts.
Three days after the complaint was filed, federal Judge Ruben Castillo dismissed it "until the federal court's concerns about its jurisdiction are addressed."
"The court's initial review of this recently filed complaint leaves it with serious concerns about its ability to proceed," Judge Castillo wrote in his July 6 order. "First, it is obvious that this lawsuit seeks to affect an ongoing state court proceeding. Second, the arbitration agreements herein do not allow for the type of classwide arbitration being sought from this court."
Briefs about jurisdiction were due to Judge Castillo Aug. 30. At press time, the judge had not ruled.
Going forward
No trial date has been set in Madison County court, but attorneys are proceeding with discovery. Those involved in the suit hope it will raise physicians' consciousness about several issues when they're dealing with health plans.
"We hope physicians will begin looking at contracts and deciding whether arbitration is good or bad for their practice," Cates said.
Her law firm is also representing physicians who recently filed similar contract cases against Blue Cross Blue Shield and Healthlink Inc. in Madison County court.
The AMA is helping in Dr. Kaiser's case by providing its expertise on CPT codes. Dr. Palmisano said physicians should be on the lookout for language in contracts that address how physicians will be paid.
"It should be very clear what methodology is being used for payment," he said. "Physicians have to be careful."
Dr. Kaiser said he hoped to change the way physicians and health plans interact. "They do not negotiate with small providers," he said. "It's the big boys quashing the little boys, and they're doing it because they can."
ADDITIONAL INFORMATION:
Case at a glance
- Timothy N. Kaiser, MD, and Suzanne LeBel Corrigan, MD, v. CIGNA Corp., CIGNA HealthCare of St. Louis and CIGNA HealthCare of Texas
- Venue: Circuit Court of the Third Judicial Circuit, Madison County, Ill.
- At issue: Whether CIGNA breached contracts with doctors by bundling CPT codes and downcoding medical services and whether the company had a policy to bundle and downcode.
- Potential impact: The judge has given the lawsuit nationwide class action status, so the outcome could affect hundreds of thousands of physicians who contract with CIGNA. It's the first HMO lawsuit to get class action certification.
Are you a member of the class?
According to Madison County, Ill., Judge A.A. Matoesian's order, here's who can be part of the class action lawsuit filed against CIGNA. A physician or health care provider who from May 26, 1990, to the present:
- Executed a preferred provider organization fee-for-service agreement with CIGNA.
- Submitted claims for covered services and/or supplies pursuant to the agreement.
- Had claims audited by CIGNA's ClaimCheck computer software program before any payment.
Court home to class action suits
If getting class action status for a lawsuit is the goal, many lawyers say the Third Judicial District of Madison County, Ill., is the place to go.
The court has been home to more class action lawsuits per capita than any other U.S. county over the past few years, according to the Indianapolis-based Center for Legal Policy at the Manhattan Institute's September study "They're Making a Federal Case Out of It ... In State Court."
Only two class action lawsuits were filed in the Madison County court in 1998, but that number jumped to 39 cases in 2000, according to the study. The judges there are on track to see 75 lawsuits seeking class action status filed this year.
Nestled in a 260,000-person county along the Mississippi River in southwest Illinois, the court has been asked to tackle automobile repair, telephone bills, cell phone connections, clogged drains, Barbie dolls and physician contracts with health care plans.
"In sum, Madison County judges have been asked over the last two years to set national policy on issues that could affect the daily lives of millions of Americans throughout the country," authors John H. Beisner and Jessica Davidson Miller wrote in their report.
Two cases in 1998 that were certified as class actions for the nation appeared to have "started the ball rolling," according to the report. One involved underpayment on a profit-sharing plan; the other, shipping charges.
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