Five HMOs Hit with Mega Class Action Lawsuits
At a time when it appears the managed care industry could not be more litigious, eight law firms have filed class actions against five of the nation's largest health maintenance organizations.
The lawsuits come at a time when the backlash against managed care restrictions is at an all time high. But officials from the nation's leading health plans generally dismiss these types of suits as baseless.
For example, Aetna Inc. said earlier this week that it has no intention of settling a lawsuit alleging that its health maintenance organizations denied patient care. "We believe that this lawsuit is baseless. We have no intention of settling a suit where a class hasn't even been certified. Indeed, in our view it ought to be dismissed ," Joyce Oberdorf, a spokeswoman for Aetna, told Reuters.
That's not stopping the law firms, know collectively as the REPAIR Legal Team, from moving forward. The attorneys said they are seeking to change an entire industry's practice of putting profits before patient care.
The class action lawsuits single out five of the country's largest HMO operators, which collectively provide health care to approximately 32 million people.
The lawsuits charge Cigna Corp., Foundation Health Systems Inc., Humana Inc., PacifiCare Health Systems Inc., and The Prudential Insurance Company of America (acquired by Aetna recently) with violations of the Civil Racketeer Influenced and Corrupt Organizations Act (RICO) and the Employee Retirement Income Security Act (ERISA). In October, the REPAIR Team filed a similar lawsuit against the nation's largest HMO operator, Aetna U.S. Healthcare.
"We're acting today to fix the broken promises the HMO industry has made to the people who entrust their very lives to these companies," said REPAIR Team attorney Richard Scruggs, a partner with Scruggs, Millette, Bozeman and Dent, Pascagoula, Miss. "We will ensure that MDs--not MBAs or CPAs--will determine patient treatment," he said. "But we will also insist that these changes go beyond the window dressing of the UnitedHealth Group and ensure that doctors actually get true final say. That means an end to all interference in the doctor-patient relationship--both before and after the fact. It means an end to doctor 'profiling.' And it means bringing their compensation policies, disease definitions, covered benefits and treatment guidelines in line with what is best for patient care, not market share."
The lawsuits charge the defendants with engaging "in a nationwide fraudulent scheme" including misrepresenting that "coverage and treatment decisions are made on the basis of 'medical necessity.' The lawsuits claim the health plans aggressively engaged in internal policies and practices that are designed to deny or limit claims and medical services.
The complaints take issue with common managed care policies, including establishing financial incentives that the attorneys claim induce both doctors and claims reviewers to limit treatment; imposing "gag" clauses that penalize doctors who discuss certain treatment alternatives with their patients; and limiting patient access to specialists.
The five lawsuits, filed Nov. 22 in U.S. District Court for the Southern District of Mississippi, Hattiesburg Division, seek, among other things, compensatory and punitive damages and an injunction enjoining the defendants from pursuing the policies and practices cited in the complaints.
SOURCE Scruggs, Millette, Bozeman & Dent