About the Settlements

The Settlements reached with the Blue Cross Blue Shield Association, the majority of Blue Cross Blue Shield plans, Aetna, CIGNA, Health Net Inc., Prudential Insurance Company of America, Anthem/WellPoint, and Humana Inc. include industry leading improvements to physician-related business practices as well as cash payments to physicians in accordance with terms outlined within the Agreements. The terms of the Settlements will help to streamline communication between physicians and these companies, reduce administrative complexity in the claims payment system and help improve the quality of the health care delivery system. These business practice changes are expected to result in increased predictability and speed of claims payment, creating significant value for physicians by reducing time-consuming and costly administrative burdens and giving physicians and their office staffs more time to focus on their central mission -- providing health care to patients. In addition to these business practice changes, the HMO Settlements provide for funding for two separate not-for-profit foundations dedicated to improving the quality of health care in America. For more information about the Physicians' Foundation for Health Systems Excellence and the Physicians' Foundation for Health Systems Innovations please go to www.physiciansfoundation.org.

About the Physicians Advocacy Institute, Inc.

The Physicians Advocacy Institute, Inc., (PAI) is a not-for-profit 501(c) (6) advocacy organization established in 2006 with funds from the Multi-District Litigation (MDL) class action settlements against major national for-profit health insurers. The PAI’s primary mission is two-fold: to guarantee compliance with the settlements by these health insurers; and to develop projects and tools for the future that guarantee the viability of physicians’ medical practices and the ability of physicians to deliver quality patient care. Specifically, the final settlement between plaintiffs and the Prudential Insurance Company of America indicates that settlement funds will be used “to address issues relating to abuses of managed care,” through assuring compliance and “identifying and addressing future health plan practices that burden the ability of Class Members to be paid fairly for their services.”

The class action lawsuit known as Managed Care Litigation (MDL No. 1334) was originally filed in 2000 and was a combination of several cases filed around the country on behalf of physicians against for-profit health insurance companies. The basic allegations were that these health insurance companies, among other complaints, systematically denied, delayed and/or reduced payment to physicians who had delivered services to covered patients. Seven settlements with national health insurers have been reached to date: Aetna; CIGNA; Prudential; Anthem/WellPoint; HealthNet; and Humana. Most recently, on April 27, 2007, several Blue Cross Blue Shield plans and plaintiffs announced settlements.

While the settlements have resulted in retrospective relief to physicians, the real value of the settlements for physicians is the prospective relief provided. The settlements offer protection to physicians (class members) going forward, including a compliance dispute procedure and a billing dispute procedure, which allow physicians to have a process for resolving disputes with the defendant health insurers over issues such as downcoding, bundling, refusal to recognize modifiers, prompt payment, and a number of other protections.

The plaintiff state and county medical associations wanted to continue the momentum to restore fairness in managed care business practices gained through the lawsuits and resulting settlements, and the Physicians Advocacy Institute, Inc., was formed. The PAI believes it is imperative that health insurers continue to be held accountable to the terms of the settlements to which they agreed. PAI’s intent is to ensure compliance by the settling health plans and in order to do this the PAI has established a Compliance Committee.

The PAI intends to undertake specific projects to educate physicians about various managed care initiatives to enable physicians to be better informed and to understand how various health plan initiatives, like pay for performance and “rating” of physicians, will impact the day-to-day care that physicians provide their patients. PAI intends to be an advocate for physicians in all areas of health insurers’ managed care business practices so physicians and state medical associations are prepared to respond in knowledgeable, timely and appropriate ways.

For more information about the PAI: Mary Jo Malone, Executive Director, PAI, maryjomalone@sbcglobal.net.

Physicians Advocacy Institute Board of Directors

The PAI is governed by a Board of Directors comprised of the executives of the following plaintiff state medical associations:

President
Robert W. Seligson, MBA, MA
Executive Vice President/CEO
North Carolina Medical Society


Vice President
Sandy Johnson
Former Executive Vice President/CEO
Nebraska Medical Association


Secretary
Donald Alexander
Chief Executive Officer
Tennessee Medical Association


Treasurer
Louis J. Goodman, PhD, CAE
Executive Vice President/CEO
Texas Medical Association


William R. Abrams
Executive Vice President
Medical Society of the State of New York


Todd Atwater, JD
Chief Executive Officer
South Carolina Medical Association


David Cook, JD
Executive Director
Medical Association of Georgia


Joseph L. Dunn, Esq.
Executive Vice President/CEO
California Medical Association


Matthew Katz
Executive Director
Connecticut State Medical Society


Charles B. Shane, MD
Louisville, Kentucky
Lead Physician Plaintiff


Donald P. "Rocky" Wilcox, JD
General Counsel
Texas Medical Association
Compliance Committee Liason