Your Day in Court Read your contracts before you call your lawyer

by Shellie Pruden, DCMS director of medical practice relations

Historically, physicians have avoided courtrooms like the plague. But that may no longer be true. With increasingly fewer resources to fight unpaid claims and unfair business practices, many physicians are turning to the courtroom for assistance.

Physician practices may find small claims court an effective tool for recovering unpaid claims. Small claims suits can be filed for $12 in Dallas County. The forms needed to file the suit are available at the court clerk's office. This one-page form must be completed and notarized, stating the claim in non-legal language. There is an additional $50 charge to serve the citation to the person or business being sued. More than one suit may be filed at a time and hearings can be set on the same day. In Dallas County, court dates usually are set six months to one year out. There is a $5000 maximum limit per suit.

Some physicians filing in county court under deceptive trade practice statutes are experiencing successes that include recovering treble damages and attorney fees. "Many statutory remedies are available for recovering unpaid claims," says Dallas attorney Neil Prevost. "But physicians have a natural reluctance to deal with lawyers, so they don't exercise their rights under the law." Filing a suit in county court costs $100 plus attorney fees. Some attorneys work for a flat, per-hour fee, while others work on a contingent basis. Depending on your managed care contract, this option may not be available to you.

"Binding arbitration" has become a contractual buzzword for avoiding court. In Dallas County, it costs $500 to file an arbitration case and each party contributes $1500 to pay the arbitrator. Although this $2000 up-front cost prevents filing suit for the majority of a practice's unpaid claims, binding arbitration may take place long before you could have your day in court.

Not only are physicians filing suit in local courts, TMA is investigating larger class-action remedies. Delegates at the recent TMA House of Delegates meeting approved a resolution recommending that the Board of Trustees actively pursue litigation opportunities at the state and federal levels to challenge abusive managed care payer practices.

For this strategy to be effective, a few things should be considered. First, the claims have to be owed, adjudicatable, and properly filed. With the recent implementation of the Prompt Payment laws passed in House Bill 610, insurance companies and other payers, including IPAs, are required to amend contracts to define a clean claim. In addition, many new contracts and amendments are asking physicians to waive their right to sue and recover under the penalty provisions of the law. Before you engage in a lawsuit or arbitration, review your contract to find out if you have inadvertently limited or altered your ability to seek legal remedies. Physicians don't have to accept these provisions. Shockingly, a recent TMA survey revealed that 51 percent of Texas physicians have never attempted to negotiate an insurance contract. Without careful contract negotiations, physicians have little or no recourse for unfair business practices and nonpayment of claims.