Special E-Mail Bulletin
September 2002
RICO class action suit certified!
Special E-Mail Bulletin
Hello, everyone.
In the past I've told you about a major lawsuit in progress in Miami. It involves a number of state medical societies seeking class action status for their RICO suit against several HMOs.
Today Judge Moreno certified that the suit can go forward as a class action. This is HUGE. Keep your fingers crossed. This could be one of the most significant managed care lawsuits in years.
This story is from Reuters.
Gil Weber
U.S. judge gives doctors class status in HMO suit
Thursday September 26, 2:39 PM EDT
By Michael Connor and Jim Loney
MIAMI, Sept 26 (Reuters) - A U.S. judge on Thursday certified class action status for about 600,000 doctors in a lawsuit accusing leading health maintenance organizations, such as Aetna Inc. (AET) and CIGNA Corp. (CI), of fraudulently cutting their fees.
In the same ruling, U.S. District Judge Federico Moreno denied class certification to an estimated 145 million patients covered by the HMOs.
Lawyers representing several state medical associations accused big health groups, including Humana Inc. (HUM), of defrauding doctors of fair payments by arbitrarily and routinely cutting fees.
Attorneys for the health organizations fought class-action status, saying a single lawsuit would be unwieldy and arguing individual disputes could be handled through arbitrations.
The ruling simplifies the legal tasks for lawyers representing the doctors by consolidating their claims into a single lawsuit with potentially massive financial penalties. But the judge denied the same status to patients seeking compensation from the health groups.
The patients and doctors sued the HMOs under the Racketeering Influenced and Corrupt Organizations Act, alleging the health insurers conspired to lower their costs by underpaying doctors or delaying payment while denying patients optimum medical care.
The cases were consolidated in the U.S. District Court in Miami and divided into a "provider track" involving plaintiff doctors and a "subscriber track" involving HMO clients.
Moreno ruled in July that lawyers could begin questioning industry executives and perform other discovery on Sept. 30.
Plaintiffs on the provider track include medical associations in California, Texas, Georgia, Florida, Louisiana and other doctors' groups.
Karen Ignagni, president of the American Association of Health Plans, the Washington-based HMO lobbying group, called the charges "trumped up" and questioned whether 600,000 physicians really qualified for class action, citing Moreno's dismissal of doctors' claims in recent years.
"What you are left with are payment disputes of individual doctors in different plans," Ignagni said.
In his conclusions, Moreno said the doctors' class certification was conditional and was subject to decertification at a later stage of the litigation. He also said the subscribers' case, with 145 million potential plaintiffs, would "not be manageable."
"It is neither convenient nor desirable to accord class status to this case given its factual and legal complexities," he wrote.
Defendants in the subscriber-track case include Aetna; CIGNA; Humana; Foundation Health Systems, now known as Health Net Inc. (HNT); and UnitedHealth Group Inc. (UNH).
Defendants in the provider-track case include Aetna, CIGNA, Humana, Foundation Health, PacifiCare Health Systems Inc. (PHSY), United and WellPoint Health Networks Inc. (WLP).
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