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New Jersey Doctor Files
Class-Action Against HMOs

April 13, 2002
A New Jersey doctor is suing four of the state's largest HMOs, claiming they are shortchanging physicians and hurting patient care.

"It is almost impossible to comply with the demands of the insurance companies," Dr. John I. Sutter said. The suit names Horizon Blue Cross Blue Shield of New Jersey, Cigna Healthcare of New Jersey, United Healthcare of New Jersey and Oxford Health Plans.

Sutter's lawsuit seeks unspecified compensation for denied, delayed and reduced claims and additional punitive damages. Attorney Eric Katz said damages could total "many millions of dollars."

The suit claims that the HMOs violate the state's Consumer Fraud Act by engaging in "a pattern of deception." It also charges that the companies violate state laws requiring that claims be paid within 30 days and that claims are regularly and improperly "downcoded," paying doctors for a simpler procedure than the one they actually performed.

Dr. Sutter said that, for example, vision and heating screeenings, a normal part of routine check-ups, are reimbursed at such a low rate that the physician loses money on the procedure.

Similar suits are pending elsewhere, according to a recent Associated Press roundup. Doctors have filed class-action suits in Texas, Miami, Kansas and Connecticut. In New Mexico, a judge recently dismissed a lawsuit filed by senior citizens who accused St. Joseph Healthcare of using bait-and-switch tactics in its Medicare-Plus plan.

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