Healthcare Business News

UnitedHealthcare loses appeal of injunction in Medicare Advantage suit

By Paul Demko
Posted: February 10, 2014 - 12:45 pm ET

A federal appeals court Friday rejected UnitedHealthcare's request to toss out a preliminary injunction prohibiting the insurance company from dropping doctors from its Medicare Advantage networks in Connecticut. Instead the judge modified the injunction to give the affected doctors 30 days to file for arbitration contesting their removal.

The lawsuit was filed by the Fairfield County Medical Association and the Hartford County Medical Association in November. A preliminary injunction was issued in December by a federal judge preventing UnitedHealthcare from dropping the doctors. The insurance company appealed to the 2nd U.S. Circuit Court of Appeals in New York.

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Mark Thompson, executive director of the Fairfield County Medical Association, hailed the appellate court's decision. “We think that this case is precedent-setting,” Thompson said. “It's telling the insurance companies that you can't just drop physicians from your panel. You've got to give them a good, bona fide reason why you're dropping them.”

UnitedHealthcare also expressed satisfaction with the appellate court ruling. "We are pleased that the court determined the injunction should be lifted in short order and are happy to work with physicians who have concerns about their status, even as it remains essential to offer networks that provide better health outcomes and more affordable coverage for our members," UnitedHealthcare spokeswoman Jessica Pappas said in a prepared statement.

The case is being closely watched across the country as insurers in many markets seek to narrow their networks to cut costs as payments for the private Medicare Advantage program are reduced. A similar lawsuit filed by the Medical Society of the State of New York is currently pending in federal court.

The issue of narrow networks is also becoming an increasingly contentious issue for plans being sold through state and federal exchanges. Legislatures in several states are considering proposals that would place new requirements on insurers regarding which providers must be included in their networks.

Dr. Robert Russo, chairman of the Fairfield County Medical Association, argued that UnitedHealthcare's attempt to eliminate hundreds of doctors was a backhanded means of trying to avoid the new federal prohibition on denying care to individuals with pre-existing conditions. “The victory for us is showing the insurance companies that the physicians are looking out for the interest of their patients,” Russo said. “We're not going to let the system be that manipulated.”

Correction: This story has been updated to clarify that the judge ruled on UnitedHealthcare's appeal of a preliminary injunction.

Follow Paul Demko on Twitter: @MHpdemko

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