Evoking a set of laws originally adopted to fight organized crime, the ADA May 19 filed a class-action federal suit, alleging that some of the nation’s largest insurers have conspired to “deny, reduce and delay” payments to dentists under contract to the plans. This latest civil complaint, filed in South Florida’s U.S. District Court, Miami Division, is the third ADA lawsuit aimed at defending the dentist-patient relationship and halting what the Association sees as unlawful insurance industry practices.
From American Dental Association:Dentists sue insurers under RICO Act’Fraud, extortion, racketeering’ cited
By James Berry
Evoking a set of laws originally adopted to fight organized crime, the ADA May 19 filed a class-action federal suit, alleging that some of the nation’s largest insurers have conspired to “deny, reduce and delay” payments to dentists under contract to the plans.
This latest civil complaint, filed in South Florida’s U.S. District Court, Miami Division, is the third ADA lawsuit aimed at defending the dentist-patient relationship and halting what the Association sees as unlawful insurance industry practices.
The ADA’s earlier class actions, against Aetna Inc. and Wellpoint Health Networks Inc., went after business practices that allegedly harmed nonplan or “out-of-network” dentists.
This new complaint pursues alleged transgressions against “in-network” dentists and seeks redress under the Racketeer Influenced and Corrupt Organizations Act, better known as RICO. The suit also evokes state statutes.
“This latest lawsuit is another example of the Association’s advocacy for its members, for our profession and for the patients we serve,” said Dr. T. Howard Jones, ADA president.
“These are important issues that affect dental health care, and the ADA rightly should be stepping in to address them,” added Dr. Jones. “Our case alleges a conspiracy among insurers who dominate the marketplace. These insurers are not living up to their contractual agreements with participating dentists, and that is bound to have a negative effect on their patients and the dental health care system.”
The seven-count complaint targets some of the best-known insurers in health care and levels a stunning array of charges: unlawful “bundling and downcoding” of dental claims, mail and wire fraud, extortion, conspiracy, racketeering, and violations of state breach of contract and “prompt-pay” laws.
Named as defendants in the complaint are:
* Cigna Corp., its subsidiary Cigna Dental Health Inc., and Cigna affiliate, Connecticut General Life Insurance Co.;
* MetLife Inc. and its subsidiary, Metropolitan Life Insurance Co.;
* Mutual of Omaha Insurance Co.
Together, these companies underwrite dental and other health coverage for millions of Americans and include thousands of dentists as plan providers. MetLife’s Preferred Dentist Program, for example, serves nearly 13 million patients and has more than 57,000 general and specialty dentists under contract.
Joining the Association as plaintiffs in this latest suit are two ADA-member dentists who represent the class of in-network, plan providers allegedly harmed by the defendants’ business practices.
Identified as “class plaintiffs” in the suit are Dr. John Milgram, a general dentist from the Chicago suburb of Kenilworth, Ill.; and Dr. Scott A. Trapp, a general dentist from Omaha, Neb. Both men are under contract to one or more of the insurers named as defendants.
“Drs. Milgram and Trapp are to be commended for stepping forward to represent their colleagues in this complaint,” said Dr. James B. Bramson, ADA executive director. “With their assistance, we want the insurance carriers to know that the Association is going to work hard to protect both the patients and the practitioners. In short, the carriers need to play fair, and by using these business practices, they aren’t.”
Added Dr. Bramson, “The Association will use the judicial system to prevent carriers from undercutting or delaying compensation to the dentists.”
The suit alleges that the defendants “aided and abetted each other” in a conspiratorial “dental enterprise” to obtain “money and property belonging to the plaintiffs.”
Specifically, the complaint says the insurers:
used automated claims processing systems and software to “downcode” legitimate claims to less costly procedures;
undercounted the patients included in their capitation plans as a way to trim the “per-member, per-month” fees paid to the class plaintiffs;
used undisclosed “cost-based” or other actuarial criteria unrelated to covered procedures or services to approve or deny claims;
denied or reduced claims by “bundling” two or more procedures into one procedure billed at a lower rate;
used systems that automatically “pend” claims, suspending them even when no additional information is required or requested;
intentionally understaffed their claims processing departments in order to slow payments;
mailed plaintiffs Explanation of Benefits statements that “misrepresent or conceal” the way a claim actually was processed.
used their economic power and marketplace dominance to “coerce plaintiffs, with the threat of being denied patient referrals,” forcing dentists to provide care on a “take-it-or-leave-it basis.”
used their market dominance to amend contracts without the providers’ consent, with no mechanism for review.
“If only one defendant engaged in these activities,” the ADA notes in its complaint, “dental providers could and would refuse to do business with that defendant.”
By working together, however, the insurers were able “to effect and perpetuate their schemes,” the ADA says.
Peter M. Sfikas, the Association’s chief counsel, said the ADA’s earlier complaints against Aetna and Wellpoint, originally filed in Illinois, were combined with similar suits across the country and transferred to the federal court in Miami “for pretrial discovery and pretrial motions.”
As a time-saver, the ADA’s latest suit was filed directly in the Miami federal court.
“The conduct that we have found with reference to the defendants in this lawsuit is pervasive, unfair to patients and the profession, and, I believe, illegal,” said the ADA’s chief attorney. “These are matters that should be brought to the attention of the federal courts and rectified there.”