GOVERNMENT & MEDICINE

Hawaii medical society sues major insurer

State courts in more than a half-dozen states have seen similar lawsuits filed on behalf of physicians.

By Tanya Albert, AMNews staff. Sept. 2, 2002. Additional information

The Hawaii Medical Assn. in August sued the state's dominant health plan in state court, claiming that the company arbitrarily overrules physicians' medical decisions and has established policies to underpay physicians.

HMA sued the Hawaii Medical Services Assn. and filed a proposed class-action suit against the health plan on behalf of Hawaii's physicians.

"We have tried everything over the years to get HMSA to deal fairly and reasonably with physicians," said HMA President Gerald J. McKenna, MD. "Our efforts have been in vain."

Some of the other complaints HMA makes in the lawsuit are that the health plan:

• Fails to pay physicians in a timely manner.
• Does not provide a proper explanation when a claim is denied.
• Arbitrarily reduces physicians' payments by downcoding, bundling or refusing to pay a modifier.
• Fails to properly staff clinical and utilization management departments causing physicians to increase staff.
• Uses computer programs to automatically reduce or deny physician payment.

"Our HMA member physicians have told us some real-life examples of these abuses," Dr. McKenna said. "Anesthesiologists have been told that they don't need to be present during the administration of anesthesia for certain procedures that the HMSA has decided can be done without an anesthesiologist. This despite the best medical judgment by the physician that his or her presence is necessary."

HMSA did not have an immediate response to specific claims the lawsuit makes. "We are reviewing the suit, and we will be responding to the court in the next few weeks," said Cliff Cisco, a senior vice president for HMSA.

Hawaii is the latest state in which physicians or medical associations have sued insurers in state court. Doctors or medical societies in Illinois, Louisiana, New Jersey, New York, South Carolina, Tennessee, and the Cincinnati area have filed lawsuits similar to the HMA lawsuit.

The state court approach has so far been a little less complicated than the federal court tactic. Dozens of lawsuits filed on behalf of physicians and patients in federal courts have been consolidated in one court in Miami for pretrial hearings.

State courts are moving more quickly than the federal courts.

While a federal judge in Miami still considers whether the cases there will be allowed to go forward as class-action suits, an Illinois court has already ruled that two physicians can proceed with a lawsuit they filed against CIGNA and certified the case as a class-action suit.

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Hawaii Medical Assn. v Hawaii Medical Service Assn.

Venue: State of Hawaii First Circuit Court
At issue: Whether the state's largest health plan uses illegal policies that result in deliberate underpayment of physicians in Hawaii.
Potential impact: If physicians are successful, they say it will stop managed care abuses in a market in which one health plan dominates.

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Copyright 2002 American Medical Association. All rights reserved.