Kan. Physicians Class Action Against Insurers to Move Forward

December 7, 2006

A class-action lawsuit involving more than 2,200 physicians will be allowed to proceed after a Jackson County judge denied three insurance companies’ request for arbitration.

The doctor groups filed suit against Blue Cross and Blue Shield of Kansas City, Humana and UnitedHealthcare in February 2005. The suit claimed the three insurers were violating antitrust laws by conspiring to fix prices they paid to physicians for services to customers and refusing to negotiate reasonable reimbursements.

Most the doctors’ contracts with the insurers included clauses sending disagreements to a third-party arbitrator, which the insurance companies demanded and a special master in the case recommended.

But Circuit Judge Charles E. Atwell supported the doctors’ opposition to arbitration.

“This court believes that the unique facts to this particular litigation creates a factual perfect storm that makes these contracts unconscionable and against the public policy,” Atwell wrote in his ruling Monday. “To enforce these arbitration agreements would be tantamount to granting immunity to these defendants regarding any kind of claim touching upon conspiracy or relief as part of a class action.”

Atwell said the case would be put on hold while the insurance companies appeal his decision.

Diane Breneman, the physicians’ attorney, praised Atwell’s decision, saying “there’s no connection between the doctors’ contracts and health insurers’ anticompetitive conduct in their price fixing or forming a monopoly in Kansas City.”

Blue Cross spokeswoman Susan M. Johnson said her company will appeal the decision.

“Our provider contracts require these types of disputes be resolved through arbitration, not the courts,” Johnson said in an e-mail to the Kansas City Star.

Humana spokesman Jeff Blunt, also in an e-mail, said the company also plans to appeal and was disappointed in the ruling.

“The reason our contracts require arbitration is to allow both parties to settle differences without dragging them through the courts,” Blunt said. “Arbitration is a fair, fast and less costly way to resolve issues such as this for all parties involved.”

A spokesman for UnitedHealthcare said the company doesn’t comment on pending litigation.

Doctors have filed similar cases in Wyandotte County, as well as federal court in Miami.

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