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from MEALEY'S Managed Care Liability Report October 27, 2003 MIAMI -- The managed care MDL judge on Oct. 24 granted final approval to Aetna's estimated $470 million settlement with the nation's physicians (In re: Managed Care Litigation, Shane v. Humana Inc., MDL No. 1334, S.D. Fla., Miami Div.). (Documents available. Approval order. Document #31-031107-101R. Class counsel's fee order. Document #31-031107-002R.) "[T]his Court has determined that the Settlement is fair, reasonable, and adequate and should therefore be approved," U.S. Judge Federico A. Moreno of the Southern District of Florida ruled. In May, Judge Moreno granted preliminary approval of the settlement between Aetna Inc., Aetna-U.S. Healthcare Inc. and representatives of more than 700,000 physicians and state and other medical societies. The settlement class is estimated at 950,000. Judge Moreno noted that "[t]here are six set[s] of objectors addressing the substance of the Settlement, which represent a miniscule percentage of the 950,000 class members notified through 1.9 million notices, plus extensive media coverage that this case has received. Many of these objections lack merit because the objectors can simply opt out if they have concerns about releasing their claims." "The Court is also satisfied that the amount to be received by physicians, $100 million, plus the changes in [Aetna's] procedures to pay doctors' claims . . . are of substantial value to the class," he said, referring to, among others, Aetna's elimination of "downcoding and improper bundling and computerized denial practices" and changes to standards regarding "medically necessary" services. "The Court is convinced that the [$20 million] Foundation is a material element of the agreement, obtained through more than two dozen arms' length negotiation sessions that mutually benefit both sides," Judge Moreno added. As for $50 million in fees to class counsel, including $6.5 million in expenses, "[a]lthough $43.5 million may appear on its face as exhorbitant, an analysis of work done by 152 attorneys from 26 law firms nationwide renders the fee reasonable," he said. The settlement resolves claims that Aetna violated the Racketeer Influenced and Corrupt Organizations Act and state and federal statutes by engaging in a scheme to "systematically reduce, deny and delay" payments owed to physicians who provide medical services to Aetna's insureds. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
from MEALEY'S Managed Care Liability Report October 24, 2003 Humana Subsidiaries Settle Ohio / Kentucky Doctors' Price-Fixing Lawsuits Humana Inc. announced Oct. 23 that two of its subsidiaries have agreed to settle class action lawsuits brought last year by medical groups and several physicians in the Greater Cincinnati /Northern Kentucky regions that alleged an "unlawful conspiracy" to fix the doctors' reimbursement rates (Academy of Medicine of Cincinnati v. Humana Health Plan of Ohio Inc., No. A0204947, Ohio Comm. Pls., Hamilton Co.; Academy of Medicine of Cincinnati v. Humana Inc., No. 02-C1-903, Ky. Cir., Boone Co.). The agreement, subject to approval by the Hamilton County Court of Common Pleas in Ohio and the Boone County Circuit in Kentucky, would resolve allegations against Humana Health Plan of Ohio and Humana Insurance Co. Plaintiffs are the Academy of Medicine of Cincinnati, the Butler County Medical Society, the Northern Kentucky Medical Association and several physicians. According to Humana, the settlement agreement specifies increases in reimbursement for providers in the Cincinnati and Northern Kentucky metropolitan area of about $20 million in 2004, $15 million in 2005, and $10 million in 2006. The suits comprise about 1,900 physicians, according to reports. A source familiar with the proposed settlement told Mealey Publications Oct. 23 that Humana has also agreed to establish a "compliance committee" to monitor reimbursement rates for three years starting in 2007. This aspect makes the settlement $100 million, the source said. The committee is intended to make sure there is no anticompetitive pricing, the source said. Defendants in the Ohio and Kentucky suits that have not settled are Aetna Health Inc., Anthem Blue Cross and Blue Shield, United Healthcare of Ohio Inc. and United Healthcare Inc. When the suits were filed, the physicians sought injunctive relief ordering the health insurers to cease and desist from their "unlawful conspiracy" to fix reimbursement rates and to set reimbursement rates to physicians at levels that are "reasonable" in relation to prevailing reimbursement rates in other comparable Ohio and Kentucky health care markets, plus damages. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
______________________________________________________________ from MEALEY'S LITIGATION REPORT Nursing Home Liability September 12,
2003 ST. LOUIS -- A federal magistrate judge has recommended granting the dismissal of a wrongful death suit against a long-term care facility, saying the plaintiffs lacked standing under the Missouri Omnibus Nursing Home Act to bring such an action. The judge said the only party with standing to bring the action is the decedent's estate (Barbara Dickerson, et al. v. Deaconess Long Term Care of Missouri Inc., No. 4:03cv341, E.D. Mo., Eastern Div.; 2003 U.S. Dist. LEXIS 14956). (Opinion. Document #02-030912-102Z.) Barbara Dickerson and her children sued Deaconess Long Term Care of Missouri Inc., alleging that Deaconess caused the wrongful death of her husband, Louis Dickerson. Dickerson sought relief under the Missouri Omnibus Nursing Home Act and under the state wrongful death statute. Deaconess moved to dismiss her claim under the Nursing Home Act, arguing that if the individually named plaintiffs bear the relationship to the decedent as alleged in the complaint, they are proper parties to the wrongful death action, however, they are not accorded a right to sue for a violation of the Nursing Home Act. Only the decedent or his estate may sue, Deaconess explained. U.S. Magistrate Judge David D. Noce of the Eastern District of Missouri, Eastern Division, explained in his July 8 opinion that any resident or former resident of a nursing home who is deprived of a right created by the Nursing Home Act, or the estate of a former resident may file a written complaint within 180 days of the alleged deprivation or injury with the attorney general describing the facts surrounding the violation. Judge Noce added that if the attorney general fails to initiate legal action within 60 days of receipt of the complaint, a private action may be filed within 240 days of the filing of the complaint with the attorney general. Judge Noce found that Dickerson's failure to file a written complaint with the Attorney General's Office proves "fatal to their action." He added that the Nursing Home Act intended for the attorney general to have "the first shot" at bringing an action against such facilities but provides for a private cause of action of the attorney general declines to do so. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
from MEALEY'S LITIGATION REPORT Nursing Home Liability October 10, 2003
Louisiana Court Grants New Trial In Sexual Assault Action Against Nursing Home JACKSON, Miss. -- A Louisiana appeals court on Sept. 9 granted a new trial to the family of a sexual assault victim, saying there was ample evidence that the nursing home in which she was a resident breached its duty to care for her (Shelia Dupree, individually and as conservator of the person and estate of Annie Sanders v. Plantation Point, d/b/a The Windsor Place, No. 2002-CA-00556-COA, Miss. App.; 2003 Miss. App. LEXIS 820). (Opinion available. Document #02-031010-001Z.) Shelia Dupree sued Plantation Pointe, individually and on behalf of her mother, Annie Sanders. Sanders was sexually assaulted at Plantation Pointe's Windsor Place Nursing Home by another resident. The trial judge granted a directed verdict on the issue of mental and emotional damages of Dupree. A jury found in favor of Plantation Pointe on the other claims. Dupree was denied her motion for a judgment notwithstanding the verdict (JNOV) and a motion for a new trial. On appeal, Dupree argued that the trial court, the Lauderdale County Circuit Court, erred in denying the motion for JNOV and the new trial. Dupree also argued that the trial court failed to properly instruct the jury and that the trial court erred in excluding testimony concerning mental and emotional damages and by granting a directed verdict on the issue. The Mississippi Court of Appeals reversed the trial court's finding, saying the judge abused his discretion when he failed to grant a new trial. The appeals court found that the testimony presented at trial regarding the sexual assault was "uncontradicted" and supported Dupree's claims for her mother. The appeals court added that the nursing home was to provide a safe residence for Sanders and that the overwhelming weight of the evidence showed that the facility was aware of the potential danger Duff posed and did not take action to prevent it. However, the appeals court declined to overturn the directed verdict on Dupree's individual claims for mental and emotional damages. Citing Summers ex rel. Dawson v. St. Andrew's Episcopal School Inc. (759 So. 2d 1203, 1210 [Miss. 2000]), the court explained that though it was most certainly and traumatic experience to receive news that your mother was sexually assaulted, the facts in the present case do not lend themselves to a third-person recovery. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
______________________________________________________________ from MEALEY'S LITIGATION REPORT: Disability Insurance September 24, 2003 Claims Against ERISA-Governed Disability Insurer Dismissed By Federal Judge NEW ORLEANS -- A federal judge on Sept. 5 dismissed state law breach of contract, unfair practices claims against an ERISA-governed disability insurer, finding that two of the insurance code claims were preempted and three failed to state a claim for relief (Timothy D. Letter v. UnumProvident Corp., et al., No. 02-2694, E.D. La.). (Opinion. Document #17-030924-107Z.) Timothy Letter worked for Pepsi America Inc. and was insured under the company's group disability plan with UnumProvident Corp. Letter stopped working because of a heart condition and began receiving long-term disability benefits. UnumProvident terminated benefits in August 2001, finding that Letter was no longer disabled under the plan. Letter sued under ERISA and alleged state law claims for breach of contract and unfair practices under the Louisiana Insurance Code. UnumProvident moved to dismiss Letter's state law claims, arguing that they are preempted by ERISA. U.S. Judge Carl J. Barbier of the Eastern District of Louisiana ruled that a state law claim can be saved from preemption if it is specifically directed toward the insurance industry and it substantially affects the risk pooling arrangement between the insurer/insured, citing Kentucky Ass'n of Health Plans Inc. v. Miller (U.S., 123 S.Ct. 1471, 1479 [2003]). Here, the judge held that Letter's claim under Louisiana Revised Statutes (La. R.S.) 22:657 for penalties under health and accident policies is preempted because it does not affect the risk pooling arrangement between the insurer/insured, citing Bank of Louisiana v. Aetna U.S. Healthcare Inc. ([E.D. La. July 9, 2003]). Also, the judge held that Letter has no standing to sue under La. R.S. 22:1213 because it does not allow for a private cause of action. The remaining two claims, one under La. R.S. 22:170 and 22:229 that deals with life insurance policy provisions and policy cancellation requirements, fail to state a claim upon which relief can be granted, so the issue of preemption does not need to be decided, the judge held. Similarly, the judge held that Letter has failed to state a claim under La. R.S. 22:230, which sets out definitions and provision for disability policies. The judge held that Letter may continue with his suit against UnumProvident under ERISA. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved
This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
from MEALEY'S LITIGATION REPORT: Disability Insurance October 22, 2003 (Opinion available. Document #17-031022-015Z.) Donna Napier worked as a programmer/analyst for Kentucky Central Life Insurance Co. She was insured under Kentucky's group long-term disability policy, which was funded and administered through Hartford Life Insurance Co. Napier began receiving disability benefits in 1992 after being diagnosed with bilateral thoracic outlet syndrome and later with bilateral cuboidal tunnel syndrome. Hartford terminated Napier's benefits in 2001, relying on a report from an in-house medical consultant. Hartford upheld its termination of benefits on appeal, and Napier sued under ERISA. Reviewing the termination of benefits de novo, U.S. Judge Karl S. Forester of the Eastern District of Kentucky held that Hartford erred in terminating Napier's benefits. "The record is replete with incomplete and inconsistent findings with respect to extent and severity of Napier's conditions," the judge held. The opinions of Dr. Todd Lyon, Hartford's in-house medical consultant, and Dr. Terry Trout, who performed the independent medical examination after Napier's appeal, were "crafted" from evidence that included out-of-date information and unreliable sources, the judge held. The chief source Lyon used in reaching his conclusion that Napier could perform sedentary work was the opinion of a treating physician who had not treated Napier in seven years, the judge held. Trout's opinion was based in part on outdated tests, relying on EMG studies from 1993. Copyright 2003, LexisNexis, Division of Reed Elsevier Inc., All Rights Reserved
This story and the complete archive of Mealey's Litigation Reports including related court documents are available online by subscription or on a pay-per-view basis. Go to Mealeys Online.
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