AMA Legal Battle a Victory For Fair Pay From Insurers

No Comments

In the News: Physicians receiving nearly $200M from UnitedHealth Settlement

Physicians are now receiving nearly $200 million in payments as a result of a record-breaking settlement reached last January in a historic court challenge led by the American Medical Association against UnitedHealth Group. Under the settlement’s terms, UnitedHealth is paying $350 million to help compensate patients and physicians for 15 years of artificially low payments for out-of-network services.

For many patients and physicians, this landmark settlement confirmed what had been long suspected — that UnitedHealth was not paying its fair share for out-of-network health care services. When patients visit an out-of-network doctor, insurers typically agree to pay 80 percent of the estimated going rate charged by doctors. However, the estimated rates used by UnitedHealth always seemed to fall short of what doctors were really charging.


Being shortchanged by UnitedHealth left patients with larger than expected medical bills. This situation often alienated patients who thought the physicians — not the insurance executives — were taking advantage of them. Physicians who wanted to avoid a rift with patients settled for smaller amounts and risked not being able to cover the costs of treating out-of-network patients.

Patients and physicians could do little to challenge underpayments from UnitedHealth since the insurer’s method for calculating out-of-network reimbursements was hidden by what has been called “the great black box of the health care industry.” A lack of transparency, accuracy and integrity had allowed UnitedHealth and other insurers to place profits ahead of their obligations to patients.

The AMA has long fought to increase the transparency of the health insurance industry’s payment system, and the UnitedHealth settlement is a giant step toward achieving that goal. We are committed to holding insurers accountable to their obligations.


During a decade-long fight spearheaded by the Litigation Center of the AMA and State Medical Societies, the AMA worked diligently with organized medicine, state regulators and U.S. senators to expose a fundamental conflict of interest at UnitedHealth, which called into question the entire insurer-controlled system for paying for out-of-network services.

AMA brought evidence of UnitedHealth’s improper business practices to the attention of former New York Attorney General Andrew Cuomo, who confirmed the abuses with his own investigation. Under legal pressure from Attorney General Cuomo, UnitedHealth and several major insurers agreed to meaningful reforms and to fund a new, independent system that can be used to determine payment rates for out-of-network services.

The new FAIR Health database ( takes the insurer sleight of hand out of the process and publicly reports the fair rate for any given out-of-network services. Patients and physicians will be able to go online to see how much a particular service is likely to cost – and how much the insurer is willing to pay – before the patient even sets foot inside the doctor’s office.
The AMA’s stand against UnitedHealth shows that when doctors join together and enlist the help of organized medicine, the best outcome for patients and doctors can be achieved.

The truly lasting legacy of this court challenge will continue long after the last physician has received a share of the landmark settlement. UnitedHealth and other insurers will no longer be able to pull the wool over doctors’ and patients’ eyes when determining payment rates for out-of-network care.


Every physician harmed by the actions of UnitedHealth was eligible for this settlement, though it is only through the support of AMA members that this remarkable victory was possible.  Ensure that doctors have the advocacy we need in these turbulent times and support the AMA by joining or renewing your AMA membership at

For more information on the effectiveness of organized medicine’s advocacy in the courts, including continued efforts to reform the improper business practices of insurers, please visit the AMA Litigation Center.

Dr.  Steven Stack is the first emergency physician to serve as Chair-Elect of the AMA Board of Trustees.

Leave A Reply