Federal Judge Bars United Healthcare From Trimming Medicare Doctor Network

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By Martha Kessler and Mindy Yochelson  

Dec. 6 --A federal judge has granted a request by a pair of Connecticut physician groups to issue a preliminary injunction preventing United Healthcare from removing certain physicians from its Medicare Advantage network (Fairfield Cnty. Med. Ass'n v. United Healthcare of New England , D. Conn., No. 3:13-cv-01621-SRU, 12/5/13).

In a ruling issued Dec. 5 in U.S. District Court for the District of Connecticut, Judge Stefan R. Underhill said the physicians met their burden of proving they would suffer irreparable harm if removed from the United Medicare network, while the company failed to offer evidence of injury if the preliminary injunction were granted.

In addition to barring the removal of the physicians from the network, the preliminary injunction prevents the company from notifying beneficiaries that certain providers will be terminated and bars the company from removing or failing to advertise affected physicians in United's 2014 provider directories.

The insurance company Dec. 6 asked the district court for a stay pending appeal.

Associations File Suit

The suit was filed by the Fairfield County Medical Association and the Hartford County Medical Association earlier this year, seeking to prevent United Healthcare of New England from terminating 2,200 physicians from United's Medicare Advantage network.

United is the largest private Medicare insurer in Connecticut. It had issued letters in October to more than 2,000 physicians in Connecticut notifying them that they would be removed from the network effective Feb. 1, 2014.

The company argued before the court that it has the right to amend its contracts with the physicians to discontinue their participation in the Medicare Advantage network. However, the medical associations argued that United had denied the terminated physicians' substantive and procedural due process rights under the federal Medicare Act, and that United had breached the individual contracts with each terminated physician.

In arguing for the preliminary injunction, the associations identified three categories of harm they believe would be irreparable and impossible to fully compensate with damages. The first harm is reputational, and the second is broadly related to consumer protection and focuses on consumer confusion over whether a specific physician will remain in network and the impact of that information on a consumer's decision to remain in United's Medicare Advantage program.

The third harm focuses on damage to the long-standing trust relationships between physicians and their patients, and the potential hardships for patients requiring continuous care.

The judge said he found that the associations met their burden of demonstrating that the physicians will suffer imminent harm and can't be adequately compensated through damages.

The judge also noted that the harm is magnified because United is the largest Medicare insurance provider in the state and loss of United's Medicare insureds “translates to both a larger loss of market share and a broader reputational harm to affected doctors than would termination from a smaller plan.”

The judge also said the associations demonstrated a likelihood of success on the merits of their contract-based claims.

“United's argument that it has a unilateral right to terminate participating physicians from participation in the Medicare Advantage plan by 'amendment' of that plan is not supported by the language of the contract or the parties' experience under it,” the judge wrote.

United's Response

A company representative said in an e-mail to Bloomberg BNA Dec. 6 that it respectfully disagrees with the court's preliminary ruling and plans to appeal.

“We believe the court's ruling will create unnecessary and harmful confusion and disruption to Medicare beneficiaries in Connecticut. We continue to have a broad network of doctors that is designed to encourage higher quality, affordable health care coverage. We know that these changes can be concerning for some doctors and customers, and supporting our customers is our highest priority. UnitedHealthcare will continue to stay focused on the people we serve.“

A company spokeswoman noted the motion granted is specific to members of the two associations named.

A spokeswoman for America's Health Insurance Plans said Dec. 6 that the trade association doesn't comment on rulings pertaining to specific companies but referred to its Nov. 19 letter to the Centers for Medicare & Medicaid Services, urging the agency not to interfere with plans' ability to put together focused provider networks (see previous article).

 

Medical Groups' Reaction

The decision “speaks clearly to the importance of not allowing health insurance companies to place profits ahead of patient care,” Roy W. Breitenbach of Garfunkel Wild PC, an attorney for the Fairfield and Hartford County medical associations, said in a statement.


A medical association executive sees national implications for the Connecticut case.  

Robin Oshman, president of the Fairfield County Medical Association, said that the court's ruling is “one huge step in the right direction” but that “the journey is far from over.”

Mark S. Thompson, executive director, Fairfield County Medical Association-Greater Bridgeport Medical Association, told Bloomberg BNA that he expects the next steps to be a hearing on United's appeal and then a full hearing on the merits of the case.

This “definitely has national implications,” he said.

State Response

Connecticut Attorney General George Jepsen (D) Dec. 6 called the decision “welcome news for the thousands of United Healthcare Medicare Advantage Plan beneficiaries in Connecticut who would be affected by these terminations.”

“This decision confirms my view that these terminations--unprecedented in scope--offend public policy and threaten irreparable harm to patients whose relationships with their doctors are at risk of disruption,” Jepsen said in a statement.

“United's lack of transparency for both physicians and patients has been of great concern. I urge United to abide by the court's decision and its clear contractual obligations to all affected physicians, not just those who are members of the Fairfield and Hartford County Medical Associations,” he said. “Its failure to do so will only compound the confusion United has already caused to thousands of vulnerable Connecticut patients and prospective Medicare Advantage enrollees, who deserve much greater care and respect.”

Timing of Ruling

The decision came two days before the end of the 2014 Medicare Advantage annual enrollment period in which beneficiaries may sign up for a MA or Part D (drug) plan.

“Yesterday's court decision is a victory, giving patients some assurance, if only temporary, that they will continue to receive vital care from the doctors they know and trust,” Sen. Richard Blumenthal (D-Conn.) said in a Dec. 6 statement.

Blumenthal had written to CMS Administrator Marilyn Tavenner Nov. 27, asking that the CMS allow additional time for enrollment decisions by opening an additional period or extending the current one.

“While we understand that insurance companies need the ability to adjust their network of providers in response to market realities, the significant disruptions that we are experiencing in Connecticut show an urgent need for CMS to immediately review how the network adjustment was made and address the needs of the consumers in Connecticut moving forward,” Blumenthal wrote.

However, Margaret Murphy, an attorney with the national Center for Medicare Advocacy, cautioned that whether doctors stay in United's networks will eventually depend on the results of their individual arbitrations (the court's decision noted that terminated physicians sought relief in order to have the time to undergo an individual arbitration before they are removed). If they lose, it could result in more confusion for United's enrollees if their doctors' contracts are terminated midyear, Murphy said. These enrollees won't have an opportunity to change Medicare plans because there is no special election period for them and “will have no choice but to change doctors or face more expensive out-of-network healthcare,” she said.

CMS's Views

A CMS spokesman said Dec. 6 that the agency doesn't comment on ongoing litigation.

However, in a Nov. 27 letter to the American Medical Association, Danielle Moon, director of CMS's Medicare Drug & Health Plan Contract Administration, said that the agency is reviewing United's networks against CMS standards in each county in the various states affected by the terminations and is investigating allegations about inadequate specialists.

“We are also meeting with UHC on a regular basis to discuss complaints and inquiries they are receiving,” Moon told Margaret Garikes, director of federal affairs, AMA.

However, managed care organizations “have the flexibility to establish and manage contracted provider networks as they choose, as long as they continue to furnish all Medicare Part A and B services, fully meet Medicare access and availability standards, and have a process in place to ensure that in the case of a provider termination, continuity of care is maintained for patients affected by those terminations,” Moon said.

At this point, no MA special election period is warranted, she said.

In addition, Moon said, the CMS lacks the authority to “hold in abeyance all terminations initiated just prior to the annual enrollment period,” as the AMA had requested.

The AMA has been urging medical associations to document problems in their state or specialty and to provide examples of the impact that terminated practices will have on patients.

As an example, the Ohio State Medical Association told the CMS that it has collected 18 examples that it said raise questions about network adequacy and need investigations by the federal agency.

The doctors are represented by Roy W. Breitenbach, of Garfunkel Wild PC, in Great Neck, N.Y.

United's attorneys include William H. Jordan of Alston & Bird in Atlanta, and Theodore J. Tucci, of Robinson & Cole LLP in Hartford, Conn.

 

To contact the reporters on this story: Martha Kessler in Boston at mkessler@bna.com and Mindy Yochelson in Washington at myochelson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com


The court's ruling is at http://www.bloomberglaw.com/public/document/Fairfield_County_Medical_Association_et_al_v_United_Healthcare_of. United's motion for a stay pending appeal is at http://www.bloomberglaw.com/public/document/Fairfield_County_Medical_Association_et_al_v_United_Healthcare_of/1.