Judge: ASCs and Hospitals Aren't Part of Ingenix Database Settlement

A class action lawsuit against United Healthcare filed on behalf of ASCs will move ahead in U.S. District Court in California now that a federal judge has clarified that facility-fee claims for ASCs and hospitals are not included in the 2009 settlement of a separate lawsuit over several insurance companies' underpayment based on the Ingenix database.

United Healthcare had alleged that the suit, filed against the insurance company in August 2009 in the Central District of California, was unnecessary because ASCs were already included in the 2009 settlement of the class action lawsuit filed in New York by the American Medical Association on behalf of healthcare providers.

"United is trying to bootstrap the facility claims into the settlement," says Los Angeles attorney Daron Tooch, who is representing the Downey Surgical Clinic and the Tarzana Surgery Center, a pair of California ASCs that filed the suit on behalf of all facilities that are not contracted with United Healthcare, which also owns the Ingenix database.

However, Judge Lawrence McKenna in New York explained in a July 26 memorandum that "the settlement agreement" in the Ingenix suit "covers services and supplies provided by a professional. The agreement does not cover services and supplies provided by a facility."

Mr. Tooch says he has no idea how many ASCs might be included in the class of plaintiffs. Any ASC that is out-of-network with United Healthcare is considered part of the class unless it opts out.

An attorney for United Healthcare declined to comment on the pending litigation. However, attorneys for United Healthcare have asked the judge to dismiss the case, saying that the plaintiffs' allegations of fraud under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Employee Retirement Income Security Act are unfounded. United Healthcare properly reimbursed the facilities, they say in court documents. "The applicable claims administrators reasonably applied their discretionary authority accorded by the plans."

The issue of who was included in the New York federal settlement came up after several ASCs received letters from United Healthcare saying that they were part of a class action settlement and could make claims to recover money. In court, United Healthcare alleged that the ASCs were included in the New York settlement. In return, attorneys for the ASCs wrote to Judge McKenna for a clarification.

As the case has progressed, the question of whether United Healthcare used the Ingenix database at all for ASC reimbursement has become an issue. During the discovery period of the case, attorneys for the ASCs learned that United Healthcare paid ASC claims based on multiples of either Medicare rates or contracted rates that are usually discounted in exchange for volume. "[These methods] appear to be even more flawed than the Ingenix system," write the attorneys in a statement. In light of this, attorneys for the ASCs amended their complaint in May.

A hearing on United Healthcare's motion to dismiss will be held on Sept. 20.

Kent Steinriede

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