|Did HMO Pay M.D.'s to Nix Coverage?
Class Action Seeks Compensation for Denied Coverage
Source: ABC News
W A S H I N G T O N, - Health insurer Humana Inc. was sued today in a first-of-its-kind class action suit, which alleged it failed to disclose the conditions of its health coverage and that it paid medical doctors to deny coverage.
The multimillion-dollar lawsuit against the company, which insures 6 million Americans, was filed in the Miami division of the U.S. District Court. The suit claimed that Humana concealed accurate information about when health care would be provided and when medical claims would be approved or disapproved.
Lawyers, speaking at a news conference said the lawsuit was the first of its kind against a health maintenance organization and would seek a substantial amount of compensation.
Health maintenance organizations, called HMOs, were set up to contain the spiraling cost of health insurance in the United States by restricting patients' choice of doctors and other measures. But patients often complain that decisions on their health are taken by low-paid office workers rather than by their family doctors.
This is the first case that has uncovered specific detailed examples of how a health-care company, in this case Humana, covered up from its subscribers the true way it decided whether to approve treatment and whether to pay claims of its subscribers, said Stephen Neuwirth of Boies & Schiller, which is representing some of the plaintiffs.
Louisville, Ky.-based Humana declined to comment on the suit, pending a statement it said it would make later Monday.
Gave Bonuses to Doctors
Among other things, the suit alleges that Humana paid direct financial incentives to doctors to deny coverage under the health insurance plan.
The suit said that the insurance provider, also concealed from class members that Humana provides direct financial incentives to treating physicians ... to deny coverage to individuals ... even where the proposed treatment satisfies the Humana medical necessity definition set forth in Humana's disclosure documents.
It also claims the company paid cash bonuses to claim reviewers, something they said was aimed at encouraging the denial of claims without regard to the medical needs of patients.
What we have uncovered is that Humana set up a system that gave cash bonuses to people who reviewed claims, Neuwirth said. What we know is that there were express amounts identified by Humana for these bonuses and that the bonuses were based principally on the number of claims that were denied.
The suit also alleged that claim reviewers often had no medical training.
Humana thus failed to inform (subscribers) that decisions respecting medical necessity would be made by persons without the appropriate medical experience or training to recognize medical necessity, the suit said.
Humana provides health insurance to about 6 million subscribers with almost one quarter of its users in Florida.
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