Special E-Mail Bulletin
November 2002
HMO Class Action Suit Pendulum Swings Again
Special E-Mail Bulletin
Hello, everyone.
In September I sent you a bulletin about the very important RICO class action suit being brought in Miami by physicians and medical societies against several HMOs. Judge Moreno announced that he was certifying the class action status of the suit. That was a huge victory for the plaintiffs.
Now, however, an appeals court has put everything on hold by declaring that it will decide if the case is to go forward. This story is from the Atlanta Journal-Constitution.
Gil Weber
HMOs score court victory
Lawsuit by doctors to be reviewed
Bill Rankin - Staff
Friday, November 22, 2002
An Atlanta appeals court has handed HMOs an important legal victory, agreeing to decide whether the industry has to defend a class-action lawsuit brought by 600,000 doctors nationwide.
Legal experts have said if the class-action case were allowed to proceed, the HMOs would be under pressure to pay out mountainous settlements to the country's physicians because it would be too risky to go to trial.
"This is a big win for the HMOs," said Houston attorney Barbara Radnofsky, chairwoman of the American Bar Association's committee on managed care litigation. "The implications of class-action certification to any defendant can be so devastating. In this case, it's the sword of Damocles hanging over the industry."
Two years ago, doctors sued 10 of the nation's largest HMOs, accusing them of engaging in a racketeering conspiracy by wrongly delaying and denying reimbursement of health care costs. The physicians also allege the HMOs have fraudulently rejected expensive but necessary medical treatments.
The litigation was initially brought by doctors in five states, including Georgia.
In September, U.S. District Judge Federico Moreno of Miami certified the class-action case on behalf of 600,000 doctors nationwide. The judge said the plaintiff doctors "have done more than just allege a common scheme; they have demonstrated facts which support its existence."
Moreno also set a trial date for next spring and ordered the HMOs to begin turning over truckloads of documents, including billing claims submitted by hundreds of thousands of doctors since 1990.
In an order issued Wednesday, a three-judge panel of the 11th U.S. Circuit Court of Appeals unanimously agreed that Moreno's approval of the class-action case would be reviewed. It could take up to a year to decide the issue.
Jeffrey Klein, a New York attorney representing the HMOs, said the industry believes that payment disputes between HMOs and doctors should "be resolved in individual negotiations, which are much less costly for all concerned."
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