Florida Surgeon Files Suit Over Allegations Four Health Insurers Conspired To Reduce Payments to Out-of-Network Providers

An orthopedic surgeon in Florida has filed a federal lawsuit alleging that four health insurers are conspiring to give lower payments to out-of-network health providers, the Miami Herald reports. Peter Merkle charges in his suit, which is seeking class-action status from U.S. District Judge James Cohn, that Aetna, Neighborhood Health, Vista Healthplans and Blue Cross Blue Shield of Florida's Health Options have conspired since the summer of 2003 to significantly reduce payments to doctors and hospitals that are outside of their networks. Out-of-network hospitals and doctors generally bill health plans at their full rates for patients "rushed to a hospital that is out of his insurer's network," and insurers "frequently" say these rates are too high and refuse to pay them, the Herald reports. Merkle and his attorneys cite in their allegations a complicated wrist fracture, which Merkle charges $1,850 to treat and the insurers in 2003 began offering roughly between $450 and $700 dollars to treat. Merkle's attorneys said that the similarity of these reductions in payments shows the insurers are involved in a "pattern of racketeering activity" and "conspiratorial efforts" to lower their spending. Larry Kopelman, an attorney for Merkle, said that although some provider charges can be high, "what the insurance industry is doing is wrong. To simply, unilaterally pick a figure to pay is wrong." He added, "Our intent is to hopefully arrive at a usual and customary charge that's fair to everybody." Merkle said, "If they pay you whatever they feel like, you might as well close your doors and go fishing," adding that he initially was reluctant to sue the health insurers "because you don't want to bite the hand that feeds you. But then I realized that the hand wasn't feeding me, it was stealing from me."

Companies' Reactions
Aetna spokesperson David Carter said the company "typically pays more than Medicare for what is described in this particular complaint, and we believe that we are paying a reasonable amount of money under Florida law, which recognizes that paying arbitrary or unreasonable amounts are not required." Bruce Middlebrooks, a spokesperson for BCBSF, cited a 2003 arbitration decision that concluded his firm met state law by paying 120% of Medicare rates and said BCBSF "is in accordance with Florida statutes." Vista spokesperson Pam Gadinsky wrote in an e-mail, "VISTA pays nonparticipating providers for emergency services in accordance with state and federal law." Bruce Rubin, a spokesperson for Neighborhood Health, said Merkle's allegations were "ludicrous," adding, "We've been paying a certain percentage of Medicare for years. It's standard procedure" (Dorschner, Miami Herald, 1/7).