The Physicians Advocacy Institute, Inc., (PAI) is a not-for-profit 501(c) (6) advocacy organization established in 2006 with funds from the Multi-District Litigation (MDL) class action settlements against major national for-profit health insurers.

The class action lawsuit known as Managed Care Litigation (MDL No. 1334) was originally filed in 2000 and was a combination of several cases filed around the country on behalf of physicians against for-profit health insurance companies. The basic allegations were that these health insurance companies, among other complaints, systematically denied, delayed and/or reduced payment to physicians who had delivered services to covered patients. Seven settlements with national health insurers were reached to date: Aetna; CIGNA; Prudential; Anthem/WellPoint; HealthNet; and Humana. On April 27, 200, several Blue Cross Blue Shield plans and plaintiffs announced settlements.

Settlements were reached in resolution of the class action lawsuits, providing retrospective relief to physicians and a compliance dispute procedure and a billing dispute procedure, which allowed physicians to have a process for resolving disputes with the defendant health insurers over issues such as downcoding, bundling, refusal to recognize modifiers, prompt payment, and a number of other protections. The final settlement between plaintiffs and the Prudential Insurance Company of America indicates that settlement funds will be used "to address issues relating to abuses of managed care," through assuring compliance and "identifying and addressing future health plan practices that burden the ability of Class Members to be paid fairly for their services.”

Under the Settlement terms, the PAI was formed to continue the momentum to restore fairness in managed care business practices gained through the lawsuits and resulting settlements. The PAI’s Board is comprised of CEOs of several of the plaintiff state medical associations as well as an individual physician plaintiff. PAI also has a Physician Advocacy Liaison Committee (“PALC”) comprised of the General Counsels of the PAI Board-member states.

For more information about the MDL litigation and settlements, go to www.hmosettlements.com.