NEW YORK, Jan. 10, 2007 (PRIME NEWSWIRE) -- In a recent decision from the Southern District of New York, Judge Lawrence M. McKenna has ruled that claims may proceed against defendant United Healthcare Corporation (NYSE:UNH) and a number of its subsidiaries for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and federal and state antitrust laws. These statutes permit plaintiffs to seek treble damages. The decision is available on LEXIS at The American Medical Association v. United Healthcare Corp., 2006 U.S. Dist. LEXIS 93864 (S.D.N.Y. Dec. 29, 2006).
The case has been brought to recover benefits for a proposed nationwide class of patients and doctors who have been under-reimbursed by United Healthcare for medical services received from providers who are not within its network (referred to as "out-of-network" or "non-participating" providers). The named plaintiffs include not only individual members of the proposed classes, but also the American Medical Association, the Medical Society of the State of New York and the Missouri State Medical Association. In addition, several New York State unions have intervened in the action to represent their members in the Empire Plan, which insures approximately one million New York State employees, including the New York State United Teachers, the Civil Service Employees Association, the Organization of New York State Management/Confidential Employees, and the New York State Police Investigators Association.
The central claim in the case is that United Healthcare uses certain databases promulgated by its subsidiary, Ingenix, Inc., to limit reimbursements for out-of-network services to a percentage of the "usual, customary and reasonable" fees (or "UCR"). Plaintiffs contend that these databases are inherently flawed and manipulated by United Healthcare to report fees well below actual UCR rates, which United Healthcare then relies upon to underpay patients and their out-of-network providers.
Plaintiffs are represented by Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) and other co-counsel. According to D. Brian Hufford of the Pomerantz firm, "This decision is extremely important, as it will allow us to challenge practices that have previously escaped close oversight. We believe that United Healthcare has made hundreds of millions of dollars in improper profits that should have been paid to its beneficiaries for out-of-network services." If you have any questions concerning any of these litigations, please email Mr. Hufford at dbhufford@pomlaw.com, or call toll free 888.476.6529 and ask for Susan Weiswasser.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.