21 mai, 2007 19:48
Physicians Argue Proposed Federal Settlement Could Kill Separate Case Against Blue Cross
By Julie Kay
Daily Business Review
05-23-2007
Florida emergency physicians will argue in Miami federal court today that a proposed $180 million Blue Cross and Blue Shield settlement in a physician-brought class action case should not block their separate Palm Beach Circuit Court class action based on a state reimbursement law.
Southern District of Florida Judge Federico A. Moreno, after four years of litigation, thousands of pages of discovery and expert testimony, and countless hearings and teleconferences, will hold a hearing to consider the proposed settlement between dozens of Blue Cross and Blue Shield plans and 850,000 doctors around the country. A final fairness hearing will be held in the fall.
The federal case centers on class action claims by doctors that the Blue Cross plans violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by conspiring to systematically minimize or reject claims for medically necessary services. That resulted in doctors getting paid less or not at all by the HMOs, the doctors claimed.
The case is one of the last to be settled out of several huge federal class action cases that were first brought in during 2000 by 850,000 doctors throughout the country against the nation's 10 biggest HMOs.
The cases were consolidated before Moreno. Relitigation involves prominent class action attorneys from around the country, including Coral Gables, Fla., attorney Harley Tropin, Miami attorney Aaron Podhurst and Alabama attorney Archie Lamb. Most of the cases have been settled. The settlements have totaled in the hundreds of millions of dollars.
But on Friday, Paul Geller and his colleagues at Lerach Coughlin Stoia Geller Rudman & Robbins in Boca Raton, Fla., who represent the emergency doctors in the separate Palm Beach Circuit Court case, filed a motion to intervene. They will argue today that the settlement should be scuttled because it's too broad.
That could throw a wrench into the resolution of the long-running federal case as well as some $60 million in attorney fees for more than 20 plaintiff law firms.
Geller and his colleagues complain that Blue Cross and Blue Shield included a provision in the settlement that would bar their clients' suit, which was filed in 2004, as well as all other suits filed by Florida doctors against Health Options, an HMO wholly owned by Blue Cross and Blue Shield of Florida.
In an interview, Geller said the two cases have nothing in common and that their emergency physician clients would not benefit at all from the federal settlement. "What [Blue Cross] is doing is outrageous, and it won't happen on my watch," he said.
Michael Pope, a Chicago-based partner at McDermott Will & Emery who represents Health Options, acknowledged that his client is trying to close out litigation by doctors with the federal settlement.
"The whole point of the settlement is to put this litigation behind us so the doctors and the health care companies can focus on the patients and the members of the plans," he said. "The judge will decide what is best for everyone, not just for one doctor's interests." Pope added that the doctors can opt out of the federal settlement.
Tropin, who is co-counsel to the plaintiffs in the federal class action case, said he doubted that Lerach Coughlin's motion to intervene would derail the settlement.
The proposed federal settlement includes $128 million in damages for doctors and $60 million in attorney fees, and requires the Blue Cross plans to change their business practices and stop reducing or rejecting payments to doctors. It also provides an arbitration forum for doctors to dispute claims in the future.
One health care law expert not involved in either the federal or state case said he thinks Lerach Coughlin's motion to intervene was prompted in part by the fact that the firm would get no attorney fees if the Miami settlement is approved.
"If the settlement in Miami effectively precludes Lerach Coughlin from recovering attorney fees on a case they've been working on for two years, I would absolutely expect them to intervene in the case," said Gabe Imperato, a partner at Broad and Cassel in Fort Lauderdale.
But Geller said the attorney fee issue is not the motivation for the motion to intervene.
"They could offer me half their fees, and I wouldn't take them," Geller said. "This has absolutely nothing to do with attorney fees and I'm offended by that suggestion."
SHOCKING NEWS
The emergency doctors' suit, filed against Health Options, alleges that the HMO violated §641.513 of the Florida Statutes -- which sets the requirements for providing emergency services -- by failing to pay emergency doctors who are not part of the HMO's network the "usual and customary" charges for the area. Instead, the suit alleges, Health Options pays lower Medicare rates to the doctors.
Lerach Coughlin has been aggressively litigating the case for two years. After a circuit judge dismissed the suit, the firm won a reversal at the 4th District Court of Appeal last October. The appellate panel remanded the case for proceedings at the trial level. The panel found a private right of action to enforce the state law.
The suit, whose class representative is Deerfield Beach, Fla.-based orthopedist Peter Merkle, seeks hundreds of millions of dollars in past damages. It also seeks injunctive relief in the form of changes to Health Options payment procedures.
But Geller said he was shocked when he recently was told by lawyers for Health Options, including Steven Siff, a partner at McDermott Will & Emery of Miami, that the impending settlement in the federal class action case would extinguish his case.
According to Geller, his suit and the federal class action are completely unrelated. None of the physician class representatives in any of the federal HMO class action suits in Miami are even from Florida.
"What Blue Cross lawyers want to do is get a free pass to continue violating this Florida statute in perpetuity," Geller said. "They're not settling our claims; they're just trying to put up barriers to our lawsuit. They're laughing at all of Florida's emergency room doctors."
In his motion to intervene, Geller said his client seeks to intervene to object to the settlement, conduct limited discovery concerning its fairness to class members in the Merkle suit, and preserve his appellate rights.
Geller wrote that Merkle believes "it would be inappropriate for this court to even grant preliminary approval to a defective settlement such as this, where it is, by any objective standard, unfair to an entire class of Florida providers whose claims are being pursued in a state court action that is over two years old."
