Several California counties and three doctors have brought a lawsuit against the Department of Health and Human Services. The lawsuit states that Medicare has underpaid its physicians and is seeking $3.2 billion in compensation.

Seven California counties and three physicians have sued the Dept. of Health and Human Services for $3.2 billion, accusing the agency of Medicare underpayments to physicians.

The lawsuit claims that Medicare knowingly has used an outdated geographic rate system to pay physicians for more than 10 years. The formula has led to severe underpayments to doctors in some parts of the state while providing overpayments to physicians in other areas, according to the suit, filed Feb. 19 in the U.S. District Court for the Northern District of California.

This is the second time the lawsuit has been filed. The court battle started in 2007, when seven California counties, including Santa Cruz, San Diego and Monterey, sued HHS. A federal trial court dismissed that case in 2009, saying the counties did not have standing to sue on behalf of doctors.

But a Sept. 29, 2010, ruling by… continue reading

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