Physicians will soon receive long-awaited payments resulting from a hard-fought legal battle against a major health insurance company. This week U.S. District Judge Lawrence McKenna in New York cleared the way for releasing payments in the 2009 settlement that ended the historic class-action challenge against UnitedHealth Group, led by the AMA Litigation Center, which receives financial support from the NCMS and other state medical associations. Nearly $200 million in awards will be paid to settle claims from physicians for 15 years of artificially low payments from UnitedHealth for out-of-network health services.

Physician organizations, state regulators and U.S. Senators brought evidence of UnitedHealth’s improper business practices to the attention of former New York Attorney General Andrew Cuomo in 2008. At issue was the use of flawed data by UnitedHealth to justify lower reimbursement rates for physicians for out-of-network services. Mr. Cuomo’s investigation confirmed the abuses and led several major insurers to agree to meaningful reforms and to fund a new, independent system that can be used to accurately set usual, customary and reasonable rates. In the settlement agreement, UnitedHealth admitted no wrongdoing and terminated use of the Ingenix database.

The settlement led to a new FAIR Health database, which publicly reports the fair rate for any given out-of-network services. FAIR stands for “Fair and Independent Research.”

“Patients and physicians will be able to go online to see how much a particular service is likely to cost, and how much the insurer is willing to pay, before the patient even sets foot inside the doctor’s office,” AMA President Peter W. Carmel, MD, said.

Related articles and documents:

Click here for details about the settlement between UnitedHealth and former New York Attorney General Andrew Cuomo.

Read the AMA news release, Court Approves Award Payments in AMA Legal Battle Against UnitedHealth

Federal Court Grants Preliminary Approval of Historic $350 Million Settlement with UnitedHealth Group (Bulletin, 12-4-09)

UnitedHealth Group Agrees to Settlements (Bulletin, 1-16-09)

Ingenix Lawsuit Filed (Bulletin, 5-30-08)