Psychology recently gained the second settlement in an ongoing class action lawsuit involving 10 of the nation's largest managed-care companies. The plaintiffs in this litigation include a nationwide class of psychologists and nonphysician health professionals, along with the Florida Psychological Association (FPA) and other health-care professional organizations, who allege that the managed-care defendants conspired to reduce, delay and deny provider payments in violation of federal law.
In August 2006, a federal judge in Miami took the next step in the ongoing case by granting preliminary approval to Humana's settlement with the plaintiffs. The settlement calls for Humana to implement a number of policy improvements for the benefit of the class and to pay $3.5 million toward a settlement fund.
The recent Humana development follows CIGNA's settlement of a class action lawsuit that was implemented last year. In both settlements, the APA Practice Organization and its outside attorneys negotiated on behalf of practicing psychologists.
The Humana settlement fund will be available to psychologists who--provided covered services to patients insured by any defendant in the case--between Jan. 1, 1990 and Sept. 15, 2006. Psychologists who never submitted claims to Humana can participate, as long as they submitted claims to other defendants in this lawsuit: Aetna, Anthem, CIGNA, United, Wellpoint, Pacificare, Prudential, Coventry and Health Net. However, larger payment shares will go to psychologists with a large volume of Humana claims, including the following Humana subsidiaries and affiliates: Choice Care Corp., Emphesys Insurance Co. and Employers Health Insurance Co.
Psychologists must complete, sign and submit a claim form--available at www.pddocs.com/humanaprovidersettlement--by Jan. 13 to be eligible to receive payment from the settlement fund.
The Humana settlement will be similar to the $11.5 million CIGNA settlement in terms of the policy changes and the process for submitting claims. The policy changes include using the company Web site to make it easier for psychologists to transact business with the company and understand its policies; paying claims and correcting provider panel listings more promptly; and giving greater deference to the views of individual psychologists and organized psychology in making "medical necessity" determinations. The dollar amounts paid to eligible Humana claimants will be smaller, in part because CIGNA has many more covered lives than Humana.
Yet the cumulative effect is substantial. "The amounts involved in the two settlements to date total $15 million, with good potential for more settlement payouts," says APA Executive Director for Practice Russ Newman, PhD, JD. "We are now really starting to see the benefits of a class action lawsuit."
The court will decide whether to give final approval to the settlement after a fairness hearing scheduled for Dec. 1. If final approval is granted and no appeals are filed, the settlement administrator should mail settlement checks in April 2007.
The APA Practice Organization and FPA became involved in this class action litigation in 2004 to press the unique concerns of psychologists with regard to managed care. The class involved in this legal action has one case against Humana, CIGNA and the eight other large managed-care companies listed above, and another case against the nation's 70 Blue Cross/Blue Shield companies.
In psychology's companion case against the Blue Cross/Blue Shield companies, the judge recently ordered the parties to participate in mediation by mid-November. The Practice Organization hopes that this action will lead to the next favorable settlement for practicing psychologists.
--Practice Directorate staff
Additional information about the Humana settlement and the process of filing settlement claims is available at APAPractice.