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Hooper, Lundy & Bookman Sues United Health Clients In Expanded Class Action on Behalf of Underpaid Ambulatory Surgery Centers

LOS ANGELES, May 10, 2010 (BUSINESS WIRE) -- On behalf of Ambulatory Surgery Centers (ASCs) across the country, Hooper, Lundy & Bookman, Inc. (HLB) has filed an amended class action complaint charging that United Health, Ingenix, and many of their client plans systematically underpaid ASCs by millions of dollars.

On May 7, 2011, HLB filed the amended complaint, expanding the allegations based on additional evidence that the firm uncovered through the lawsuit; and added a class of additional defendants comprised of the plans that used United to price claims.

"For many years, United and other payors have systematically underpaid ASCs," said Plaintiff co-counsel Daron Tooch. "We believe that the payors' improper reimbursement calculations are the major causes of the unreasonably low amounts of reimbursement to ASCs, which improperly leaves patients on the hook for amounts that the payors themselves owe," said Plaintiff Co-counsel Daron Tooch.

In 2009, Hooper, Lundy & Bookman filed a class action complaint on behalf of all ASCs in the United States, charging United and Ingenix with underpricing the payments owed to non-contracted ASCs. The original complaint charged that United and Ingenix violated ERISA, RICO, and the California's Business & Professions Code. As alleged there, United had represented to ASCs that it had calculated usual, customary and reasonable (UCR) rates by comparing the charges of ASCs in the applicable geographic region through use of its Ingenix database.

Through discovery in the case, the firm's attorneys confirmed that United did not calculate UCR rates by comparing the charges of ASCs in the geographic region. In addition, the firm learned that United often did not use the Ingenix database at all for ASC claims, even when representing that Ingenix had been used. Instead, for many if not most claims, United simply used its in-network or Medicare rates as a baseline, coupled with what appears to be an arbitrary multiplier, when paying out-of-network claims to ASCs. Thus, United's representations to non-contracted ASCs about how it actually priced these claims appear false.

Moreover, whatever method United used -- in-network rates, Medicare rates, or the Ingenix database -- we feel it to be even more clear now that United did not appropriately calculate UCR rates. The amended complaint accounts for the expanded scope of the misconduct that has come to light.

In court hearings since that class action complaint filing, United also has asserted that it cannot be sued for ERISA violations committed by its plan clients, as it allegedly is not the formal plan or plan administrator, but merely the claims processor for plan clients. In other words, United has said that the firm must sue United's clients. Although there is dispute about whether United is correct, its position has compelled HLB to add to the complaint a class of United's plan clients, as additional defendants.

"In addition to the millions of dollars in damages to ASCs, we feel that United's underpricing of these claims also adversely affects the patients," said Plaintiff Co-counsel Glenn Solomon. "These plans are marketed to members as providing the freedom and flexibility to choose out-of-network providers, and plans charge higher premiums for this supposed choice. However, United's underpayment scheme discourages patients from exercising that choice, and results in an illusory right to choose when they do try to exercise it." About Hooper, Lundy & Bookman, Inc.: HLB's attorneys are regularly engaged in complex matters involving ASCs, hospitals and other providers. HLB's litigation lawyers are especially skilled in matters relating to health plan reimbursement.

They regularly assist provider clients with litigation, arbitration and mediation services that have resulted in numerous favorable judgments and new case law. In 2008, the firm represented California hospitals in a class action that resulted in a record settlement of more than $11 million. With clients in all 50 states and offices in Los Angeles, San Francisco, and San Diego, the firm is the largest law firm in the country dedicated solely to the representation of health care providers and suppliers. For more information, visit the firm's website at www.health-law.com.

SOURCE: Hooper, Lundy & Bookman, Inc.

CONTACT: Hooper, Lundy & Bookman, Inc. Daron Tooch, Principal, 310-551-8192 310-702-8192 (Cell) Glenn Solomon, Principal, 310-551-8179 310-503-2553 (Cell) Copyright Business Wire 2010 -0- KEYWORD: United States

North America

California INDUSTRY KEYWORD: Surgery

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Managed Care SUBJECT CODE: Lawsuit