Ken Paxton

Monday, March 24, 2003

Attorney General Abbott Reaches Binding Agreement With Pacificare To Resolve Health Care Provider Claims

AUSTIN-- Texas Attorney General Greg Abbott announced an agreement today with PacifiCare of Texas Inc. that will allow Texas doctors to receive millions of dollars they are owed for care they have provided. Under Texas law, HMOs such as PacifiCare are required to promptly pay physicians for their services, a dispute that has been at the center of this pending lawsuit.

According to the agreement, the current state lawsuit against PacifiCare will be placed on hold for several months so that the company can fully implement the terms of the agreement. The Texas Department of Insurance also is a party to this agreement.

"I am proud that we were able to enforce Texas' prompt-pay law in a way that will benefit doctors and ultimately their patients," said Attorney General Abbott. "We have put in motion a process that will temporarily suspend our lawsuit against PacifiCare, but at the same time, the agreement puts a strong burden on the company to make sure physicians are treated fairly. The end result, we hope, will be that physicians finally receive payment of millions of dollars that is rightfully theirs for health services already rendered.

"If PacifiCare fails to satisfy the doctors' claims, I will be back in court protecting the doctors' interests and working to ensure the availability of health care in Texas," he added.

Texas Insurance Commissioner Jose Montemayor said the agreement represents progress.

"The agreement reached between the state and PacifiCare is the culmination of almost two years and thousands of department staff hours expended in an effort to enforce our laws and rules regarding prompt payment," said the commissioner. "I greatly appreciate the efforts of the Attorney General's Office in helping resolve this issue on behalf of Texas physicians and hospitals."

The Texas Medical Association today lauded Attorney General Abbott's efforts.

"The Attorney General and his staff did an excellent job on behalf of Texas physicians to convince PacifiCare that it's in their best interest to finally pay doctors for services already performed," said Texas Medical Association President Fred Merian, MD, of Victoria.

The agreement will enable PacifiCare to resolve outstanding health provider claims on behalf of doctors during the bankruptcy proceedings affecting the two corporate entities used by the HMO to flow through payment of physicians' claims - Medical Select Management and Heritage Southwest Medical Group.