More than 4,000 psychologists received almost $2.2 million from a settlement with CIGNA, the first managed-care organization (MCO) to settle in a nationwide class-action lawsuit in Florida, according to the APA Practice Organization. The litigation, which involves a dozen major MCOs, alleges that the companies conspired to reduce and delay payments to psychologists and other nonphysician health professionals.
In other developments involving managed-care litigation, after providing earlier gains for psychology, the case of Virginia Academy of Clinical Psychologists (VACP) v. CareFirst concluded this past summer when the District of Columbia Court of Appeals rejected VACP's appeal.
The case originated in 1998, when APA supported VACP and individual psychologists and consumers in filing suit against CareFirst Blue Cross/Blue Shield (formerly BCBS of the National Capital Area) and Value Options. They alleged various wrongful acts, including a higher than 30 percent cut in psychologists' reimbursement that drove more than 100 mental health professionals off the MCO's panel, leaving more than 360 patients without a provider.
A March 2003 settlement of the breach-of-contract claims gave the plaintiffs every dollar in damages they could have won at trial, along with the right to appeal fraud claims that the trial court had previously dismissed. The fraud claim alleged that CareFirst defrauded consumers when marketing its health plan. The appeals court found insufficient evidence to support the allegation under the high legal standard required for fraud claims.
The Florida and VACP lawsuits are part of a long-standing and on-going initiative by organized psychology to hold managed-care companies accountable for actions that harm patients and practitioners. The legal strategy has also resulted in successful settlements of lawsuits in New Jersey and California.