AETNA: Sued for False Advertising, Racketeering
A California consumer group and three Aetna/U.S. Healthcare Inc. enrollees filed suit in federal court yesterday against the insurer under federal anti-racketeering law, charging the company engaged in false advertising. The suit, which is seeking class-action status, was filed "on behalf of nearly 6 million people who enrolled or renewed HMO membership in Aetna from July 1996 to the present." The suit seeks unspecified monetary damages and asks Aetna to "stop misleading customers" (AP/Los Angeles Times, 4/20). The suit claims that since 1996, Aetna "engaged in a nationwide fraudulent scheme designed to induce individuals to enroll in Aetna's HMO plan by representing that Aetna's primary commitment ... is to maintain and improve the quality of care." However, the lawsuit charges that Aetna's policies "severely intrude upon the physician-patient relationship and seriously restrict the ability of Aetna physicians to provide ... high-quality health care" (Haar/Silverman, Hartford Courant, 4/20). The suit says that Aetna's "true goal is to generate shareholder return and that it uses a series of financial incentives to reward doctors who give less care." Ed Howard, senior counsel for the Foundation for Taxpayer and Consumer Rights, which filed the suit, said, "In crucial areas, what Aetna's all about is making money. Aetna has embarked upon a campaign to eliminate the ability of doctors to have any kind of meaningful say in how medical care is provided." The plaintiffs brought the case under the federal Racketeer Influenced and Corrupt Organizations Act, the first under the statute since the Supreme Court ruled in January that RICO could apply to insurers (Stark, Philadelphia Inquirer, 4/20). The plaintiffs cite Aetna's use of the Postal Service and interstate commerce to back their claim that the suit is an organized crime case. Jamie Court, advocacy director for the foundation, said, "The behavior here is akin to any other racket" (Courant, 4/20). He added, "What this lawsuit will decide is whether an HMO like Aetna can define quality as any business practice it chooses" (Rose, San Diego Union Tribune, 4/20).
Pinning Them Down
USA Today reports that the suit centers on how Aetna pays its doctors and how it determines "medically necessary" care. The lawsuit alleges that Aetna rewards doctors for keeping costs below average, overrules physician decisions on medical necessity, restricts emergency room care and "[f]ails to disclose to patients the restrictions it places on doctors" (Appleby, 4/20). In addition, the suit alleges that the company instructs doctors to "give more treatment to members of non-ERISA health plans because they can sue HMOs such as Aetna" and that a company video tells claims managers to consider potential liability in making claims decisions. While Aetna would not comment, Philadelphia health care attorney Alice Gosfield said she didn't think the suit would "get very far," adding, "I think that there is a movement afoot in the plaintiff bar to get at the deep pockets of these plans." The consumer group recently filed a similar suit against Kaiser Permanente in California (Inquirer, 4/20).