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From Health Law Daily, December 10, 2013

Unilateral termination of physicians from Medicare Advantage plan by “amendment” breaches Medicare Act

By Rachel Watson, JD

Fairfield County Medical Association and Hartford County Medical Association, Inc. (Associations) received a temporary restraining order and preliminary injunction, enjoining United Healthcare of New England, Inc., United Healthcare Insurance Company, Inc., United HealthCare Services, Inc., and Unitedhealth Group, Inc. (United), from implementing the termination of approximately 2,200 physicians from United’s Medicare Advantage program. The order (1) enjoins United from terminating any of the affected physicians from United’s Medicare Advantage network; (2) enjoins United from notifying its Medicare Advantage customers that certain physician members will be terminated from the Medicare Advantage Network as of February 1, 2014; and (3) compels United to reinstate, advertise, and market the affected physicians in their 2014 directories for the Medicare Advantage Network (Fairfield County Medical Association v United Healthcare of New England, December 5, 2013, Underhill, S).

Background. The majority of Connecticut physicians who participate in United’s Medicare Advantage plan do so through a contract that governs physicians’ service of customers across all of United’s health insurance plans. United issued letters to more than 2,000 physicians in Connecticut notifying them that they would be removed from United’s Medicare Advantage Network as of February 1, 2014. United characterized these removals as an amendment to its contract with each doctor; amendments do not require action or acknowledgement by the physician. For purposes of triggering the terminated physicians’ appeal rights, however, United described its removal of physicians from the Medicare Advantage plan as a termination without cause. In response, the Associations filed a lawsuit which alleged that United denied the terminated physicians’ substantive and procedural due process rights under the Medicare Act, and breached the individual contracts with each terminated physician.

Dispute. The disagreement centers around whether an insurance company providing Medicare Part C coverage may unilaterally remove, without cause or consent, any physician in its network. United asserts that it may amend its agreements with physicians to change a physician’s participation in its different health plan products so long as it abides by the Medicare Act’s regulations governing the notice and appeal rights of terminated physicians. The Associations’ claim that the plain language of United’s Physician Contract and the language in United’s termination notices should be characterized as terminations of the agreement, not as amendments, and that the terminations are subject to the timeline provided in the contracts’ termination clause.

Standard of Review. The court took the following factors into account when determining if a preliminary injunction or TRO was justified: (1) the significance of the threat of irreparable harm to the plaintiff if the injunction is not granted; (2) the balance between the movant’s alleged harm and the harm that granting the injunction would inflict on the opposing party; (3) the probability that the plaintiff will succeed on the merits; and (4) whether a permanent injunction would disserve the public interest.

Finding. The court found that the Associations met their burden of proving irreparable harm and a likelihood of success on the merits that United breached the terms of its Physician Contract with the Associations’ member physicians. A preliminary injunction was granted to prevent the removal of affected physicians from United’s Medicare Advantage network in violation of United’s Physician Contract.

United Healthcare’s response. Several media reports noted that United was going ahead with its plans to drop physicians from its Connecticut plans who were not members of either association that brought the lawsuit. Connecticut Attorney General George Jepsen expressed disappointment in United’s decision, noting that “it will only add to the confusion that United has already caused for thousands of patients, their families and their caregivers.”

The case number is 3:13-cv-1621

Attorneys: Roy W. Breitenbach (Garfunkel Wild, PC) for Fairfield County Medical Association and Hartford County Medical Association, Inc. Brian D. Boone (Alston & Bird LLP) for United Healthcare of New England, Inc., United Healthcare Insurance Company, Inc. and Unitedhealth Group, Inc.

Companies: : Fairfield County Medical Association; Hartford County Medical Association, Inc.; United Healthcare of New England, Inc.; United Healthcare Insurance Company, Inc.; Unitedhealth Group, Inc.

MainStory: TopStory CaseDecisions MedicareContractorNews PartCNews ConnecticutNews

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