On April 27, the state's largest health care payment plan settled a class action lawsuit filed under the Racketeer Influenced and Corrupt Organizations Act (RICO). The suit was filed by a number of state medical associations across the country including the Texas Medical Association. More than 90 percent of Blue Cross and Blue Shield health plans and the Blue Cross and Blue Shield Association have agreed to implement terms of the settlement. The settlement terms include changes to  key business practice and a restructuring of  the administration  and payments for medical care for their enrollees.

The settlement includes more than $128 million in cash payment to class members which potentially includes all practicing Texas physicians. If they file a claim, providers can receive retrospective relief from payments of previously unpaid claims. The settlement must be approved by U.S. District Judge Federico Moreno in Miami prior to the claims filing process proceeding. Judge Moreno has presided over the lawsuits against Blue Cross, Aetna, CIGNA, Health Net, Prudential, Anthem/WellPoint, and Humana since they were filed in 2001. Assuming a decision is reached in late May, based on a time line of previous suits, class members should receive notices, claim forms, and instructions in the mail by June or July. At that time, physicians would be able to file a claim for monetary relief.

According to the Texas Medical Association, some of the settlement terms that Blue Cross will agreed to include:

• Ensure the payment of valid, clean electronic claims within 15 days and paper claims within 30 days;
• Provide fee schedules to physicians;
• Implement a definition of medical necessity that makes sure patients are entitled to receive medically necessary care as determined by a physician exercising clinically prudent judgment in accordance with generally accepted standards of medical practice;
• Provide physicians with access to an independent medical necessity external review process;
• Use clinical guidelines based on credible scientific evidence published in peer-reviewed medical literature (taking into account physician specialty society recommendations, the views of physicians practicing in the relevant clinical areas, and other relevant factors) when making medical necessity determinations;
• Establish an independent external review board for resolving disputes with physicians concerning many common billing disputes;
• Not automatically reduce the intensity coding of evaluation and management codes billed for covered services;
• Establish a compliance dispute mechanism to address disputes regarding the Blues' compliance with the agreement; and
• Establish and/or maintain physician advisory committees.

The settlement can be viewed at the HMO Settlements Web site.