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Thousands of Florida doctors who contracted to provide health care to patients through Foundation Health should be allowed to pursue a class action claim against the Hollywood, Fla.-based managed care company, the state’s 3rd District Court of Appeal ruled on Wednesday. In upholding Miami-Dade Circuit Judge Michael Chavies’ ruling to grant class action status, the appellate court rejected Foundation’s argument that class action proceedings are inappropriate because some of the doctors in the class are under contractual obligation to arbitrate their claims. The class action suit, filed two years ago by Miami neurologists Richard Garcia-Rivera and Kenneth M. Fischer on behalf of some 9,300 doctors, alleges that Foundation violated the prompt-payment law passed by the state Legislature four years ago. The suit asks that the trial court impose a permanent injunction to prevent Foundation from continuing to delay payments and issue a declaratory judgment that Foundation is in violation of Florida statutes, and it seeks damages including interest and attorney fees. The doctors allege that since Oct. 1, 1998, when the law went into effect, Foundation has “routinely” and “as a matter of common business practice” delayed payments and has failed to pay interest on late payments as required by law. The law requires health maintenance organizations to pay, contest or deny payment to a health care provider within 35 days of receiving a claim. If the HMO contests or denies a claim, it must provide a detailed explanation for the denial and then give the provider 35 days to respond. The HMO then must make a final decision to pay or deny the claim within 45 days of receiving that additional information. By law, claims must be handled within 120 days. If they are not, an HMO can be fined. The prompt-pay law was passed in response to an endemic problem within the managed care industry. Between Jan. 1, 2001, and April 15, 2002, Foundation received 112 late-payment complaints from providers in Miami-Dade, Broward and Palm Beach counties, according to the Florida Department of Insurance. The department in April announced that 15 of Florida’s 32 HMOs were fined a total of $550,000 for failing to make timely payments. Foundation, which was among them, had to shell out $50,000 and sign a consent order agreeing to implement measures to ensure the timely payment of claims no later than June 1. Foundation is one of four HMOs owned by Boca Raton entrepreneur Steven Scott. The other three health plans he purchased are South Florida-based HIP Health Plan of Florida, Beacon Health Plan and Tallahassee, Fla.-based Healthplan Southeast. Combined, they have some 480,000 members. Scott has said he plans to change the name of all of the plans to Vista Healthplan. Neither Foundation’s lawyers nor a spokesman returned calls by deadline. Robert Maland, a solo practitioner in Miami who filed the class action complaint, said the Department of Insurance fine, along with the discovery he has conducted, will help to establish Foundation’s liability. He could not say how much doctors are owed but whatever it is, he said, the doctors are entitled to their full contract amount plus 10 percent interest, which the law requires. “I am hopeful that Foundation will put its energies into correcting the conditions that allowed for the violations in the first instance to occur and make restitution to the hospitals and doctors around Florida who deserve to be paid,” Maland said.

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