In a case that can affect physicians across the country, a federal appeals court in New York City directed United Healthcare and two Connecticut Medical Societies to participate in mediation in an attempt to settle a lawsuit that arose after United Healthcare unilaterally terminated more than two thousand physicians from its Medicare Advantage network in 2013 through a contract amendment.
Previously, a federal district court in Connecticut granted a temporary injunction against United Healthcare. The court’s order prohibited United Healthcare from:
- Terminating any Fairfield County Medical Association and Hartford County Medical Association physicians from its Medicare Advantage network
- Notifying United Healthcare Medicare Advantage customers that certain providers will be terminated from the network
- Removing or failing to advertise Fairfield County Medical Association and Hartford County Medical Association physicians in its 2014 directory for the Medicare Advantage Network
While the injunction can be considered a big win for Connecticut Medicare Advantage physicians who were cut from United Healthcare’s Medicare Advantage network, the injunction only maintained the status quo pending an outcome of the underlying litigation and allowed physicians to individually appeal the decision internally. In the underlying lawsuit the medical associations (the “Associations”) claimed that when United Healthcare amended contracts, en mass, with individual physicians it effectuated a termination of over two thousand of its physician members from United Healthcare’s Medicare Advantage network. The Associations claim that this was done without cause and in breach of each individual contract between United Healthcare and physicians because it did not provide proper notice of termination, as required under the contract. The Associations argued before the court that the amendments served as de facto termination, harmed the reputations of the affected physicians, and most importantly, negatively impacted the vulnerable population that relies on the Medicare Advantage network to receive treatment, often for chronic diseases.
On the other hand, United Healthcare argues that it has the right to modify the Medicare Advantage network it administers. It argues that the change is being made properly and will strengthen the overall healthcare program by managing costs. The action is seen as a response to the 6.5% cuts to federal funding of the Medicare Advantage program mandated in the Affordable Care Act and as part of a coordinated nationwide strategy to reduce its provider network by 10-15 percent.
A similar lawsuit was filed on December 23, 2013 against United Healthcare by the Medical Society of the State of New York, but decisions have been put on hold pending the outcome of the federal appeals court review of the Connecticut based injunction.
With nearly 3 million members, United Healthcare is the largest Medicare Advantage insurer in the country. Do you have questions about how United Healthcare’s actions may affect your practice? Contact Frier Levitt for help guiding your practice through these turbulent times.
