A nationwide class action lawsuit has been filed against Mike Leavitt, secretary of the US Department of Health and Human Services seeking billions of dollars in back payment from Medicare. The underpayments total $340 million within California, including Sonoma, Marin, Santa Barbara, San Luis Obispo, Santa Cruz and San Diego counties.
Medicare payments are based on geographic designations first defined in 1966 and not updated since 1996. Physicians in rural areas are paid less than doctors in urban areas, and the suit claims the definition of such is outdated and unfair. The lawsuit was filed in US District Court in San Francisco and claims Medicare has been aware of the problem since 2000 but has done nothing to resolve it.
The case alleges the system underpays some county doctors under a system that classifies them in the same category as many rural areas, where medical services cost less and which receive less money from the federal insurance program than urban ones.