Doctors Plan Class-Action Suit Against HMOs
Lawyers for 80,000 physicians from Texas, California and Georgia are requesting permission to sue eight "major" HMOs in one large class-action suit, as opposed to "thousands" of smaller cases, the Dallas Morning News reports. The doctors allege that Aetna Inc., Cigna Corp., Humana Inc., Foundation Health systems Inc., PacifiCare Health Systems, United Healthcare and Wellpoint Health Networks -- "illegally profited by improperly delaying and denying reimbursement of health care costs and by fraudulently rejecting expensive but necessary medical treatments." To obtain class action status for the lawsuit, the physicians must demonstrate that the alleged "improper conduct" of the HMOs was "done as part of a conspiracy" and that the HMOs' actions caused "similar injuries" among the physicians, the Morning News reports.
Archie Lamb, an attorney for the physicians, said that the suit should be classified as class action litigation because it alleges that the insurers "conspired to develop an illegal scheme to defraud doctors of hundreds of millions of dollars in medical reimbursements" and because it charges that the health plans "deceived physicians and patients by publicly claiming that they make decisions based on medical necessity when they actually approve coverage based on costs." Lamb said, "This case is about how the HMO industry mistreated all the doctors in the very same way, causing them to suffer in roughly the same way." The HMOs, however, say the physicians' charges are "'wholly devoid' of evidence" and are asking that the case be thrown out entirely. Lawyers for the health plans deny that there was any "collusion" between the companies and say that the contractual relationship between each of the HMOs and the 80,000 physicians "varies significantly," with each insurer developing different fee structures with each physician. If the case is not discarded, the health plans are asking that the physicians be "force[d]" to prove their claims on a case-by-case basis.
The hearing, which begins today in federal court in Miami, has been labeled by doctors as "the first roadblock" to "regain[ing] ... control over health care in America." However, winning class action status for the lawsuit will prove difficult, and the physicians will need to overcome several obstacles of their own, the Morning News reports. The health plans noted that federal law "specifically prohibits such cases against HMO," and stated that the physicians involved in the suit signed contracts agreeing that "any financial disputes would be handled by private arbitrators and not through litigation." Lawyers for the HMOs also pointed out that "federal courts have been looking more critically at big class-action lawsuits in recent years." Frank Newton, dean of Texas Tech School of Law, said that the physicians' case will likely be thrown out before it reaches a jury trial. However, he added that if the case does come before a jury, "the odds turn very quickly against the insurance companies, who would then face billions and billions of dollars in damages." Frank Vandall, a law professor at Emory University, agreed that physicians face an "uphill battle," but said that the future of the case is not certain. "It will be a miracle if this case survives. But they said the same thing about the tobacco cases, too. And the tobacco industry ended up paying out monster sums of money," he said (Curriden/Conklin, Dallas Morning News, 5/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.