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Class Certified in N.J. Doctors' Suit Over
HMO's Claim-Payment Foibles
(As reported in the New Jersey Law Journal
August 2, 2004)
An
Essex County judge last Tuesday certified a class of more than
40,000 doctors seeking to recover tens of millions of dollars from
an HMO that allegedly delayed paying claims.
Superior Court Judge James Rothschild said he could "envision no
effective judicial mechanism other than a class action" to
adjudicate the issues.
But
Rothschild denied class status for the portion of the case seeking
damages for underpayment and denial of doctors' claims - via
downcoding, bundling and other practices - due to failings in all
four R. 4:32 class-action prerequisites: commonalty, typicality,
predominance of common issues and manageability.
He did grant class status on the nonpayment and underpayment claims
for a subclass of 1,884 pediatricians, even though, as he
acknowledged, neither party had asked for a pediatrician-only class.
The suit, Sutter v. Horizon, L-3685-02, alleges Horizon Blue
Cross/Blue Shield of New Jersey engaged in abusive claims-processing
practices that violated New Jersey law and breached its contracts
with the doctors.
Counsel for both sides agreed at oral argument that class
certification on the late payments boiled down to a single question:
whether individual examination was needed to determine if each
physician was owed money.
Rothschild held it did not. He rejected Horizon's argument that
class status was not warranted because some doctors who treated
Horizon subscribers might claim little or no loss. Based on evidence
showing reimbursement claims were common - averaging as many as
2,500 per doctor, and were mostly paid late - "the possibility that
any but a handful of the 40,000 physicians are owed nothing is
obviously statistically close to zero and not nearly high enough to
preclude class certification," he wrote.
The relatively small amounts of money to which each doctor might be
entitled made individual suits unlikely, so that denial of class
status would render state prompt payment laws "virtually
meaningless," he added.
Rothschild's ruling followed the lead of Judge Ronald Freeman in
Camden County, who in 2003 certified a physician class asserting
late payment claims in Zakheim v. Amerihealth HMO, L-6235-00.
The claims for decreased or denied payments, on the other hand, were
complicated by the 55 medical practice specialties involved,
doctors' disparate billing practices and other factors.
Daly Temchine, of Epstein Becker & Green, who represents Horizon,
says his client has not yet decided whether to appeal but declines
further comment.
David Mazie and Eric Katz represent the plaintiff class. |
