The American Medical Association (AMA) announced today that the United States District Court for the Southern District of New York has granted preliminary approval of the previously disclosed $350 million settlement that would resolve a class-action lawsuit against UnitedHealth Group.
The action brought by the AMA, Medical Society of the State of New York and Missouri State Medical Association, along with several other plaintiffs, alleged that UnitedHealth Group colluded with others to underpay physicians for out-of-network medical services. Originally filed in March 2000, the suit sought relief for physicians who were seriously harmed by the insurer's long-term use of the flawed database operated by Ingenix, a unit of UnitedHealth Group. A year-long investigation in 2008 by the New York Attorney General confirmed that the Ingenix database is intentionally rigged to allow insurers to shortchange reimbursements.
"The court's approval is an important step in finalizing a settlement that recognizes UnitedHealth's flawed payment scheme resulted in significant damages to physicians who provided out-of-network care to patients enrolled with UnitedHealth," said AMA Immediate Past President Nancy H. Nielsen, M.D. "Years of litigation and tireless advocacy from the AMA and organized medicine have exposed the industry-wide insurer scheme and paved the way for a more equitable way to set payments for out-of-network care."
The settlement is closely linked to a separate agreement between UnitedHealth Group and the New York Attorney General that creates a transparent replacement for the Ingenix database and trusts its operation to FAIR Health, a research network led by Syracuse University.
The court is expected to set a final approval hearing in the courtroom of the Hon. D.J. McKenna, United States District Judge.
As required by the court's preliminary approval order, a formal notice of settlement will be publicized and circulated to class members providing detailed terms of the proposed settlement, including important dates and information related to filing claims for reimbursement from the $350 million settlement fund.
A copy of the court order is available on the AMA Web site at:
http://www.ama-assn.org/ama1/pub/upload/mm/395/uhc-preliminary-settlement-order.pdf