Federal Court To Decide Whether To Hear HMOs’ Appeal Seeking To Dismiss MDs’ Class-Action Lawsuit
The 11th U.S. Circuit Court of Appeals in Atlanta within the next few days will decide whether to hear an appeal seeking to dismiss a class-action lawsuit against several of the nation's largest HMOs, a decision that carries with it "high stakes" and the potential to "change the way health care is delivered nationwide," the Atlanta Journal-Constitution reports (Rankin, Atlanta Journal-Constitution, 11/10). U.S. District Judge Federico Moreno in September approved class-action status for a lawsuit for up to 600,000 doctors suing HMOs -- including Aetna, United Healthcare, Cigna, Coventry Health Care, WellPoint, Humana Health Plan, PacifiCare Health Systems and Anthem BlueCross Blue Shield -- ruling that the HMOs "systematically obstruct, reduce, delay and deny payments and reimbursements to health care providers" (California Healthline, 9/27). The doctors allege that HMOs have engaged in a racketeering conspiracy by delaying or denying reimbursement for health services and by illegally rejecting claims for "necessary medical treatments." In the appeal, lawyers representing the HMOs "strongly criticized" Moreno's finding and said that the case has the potential to force managed care insurers to eliminate "cost-containment principles that have kept health insurance affordable for many Americans over the past two decades." The HMOs also contend that the case is "unmanageable" because of the large number of plaintiffs. According to the Journal-Constitution, if the case is allowed to proceed, it would involve "billions of claims, billions of dollars and millions of patients." Victor Schwartz, general counsel for the American Tort Reform Association, said that the legal fact-finding process, in which defendants must disclose documents to the plaintiffs, could become "so massive and costly that defendants may settle cases they could win on the merits." HMO officials said that if they are forced to pay "hundreds of millions of dollars in settlements," it would drive up the already rising cost of health care.
Doctors in the case are seeking a court-ordered injunction barring the claims processing methods currently employed by the managed care companies, according to Ken Canfield, a lawyer representing the Medical Association of Georgia and four physicians who are plaintiffs in the case. "One of our goals is to allow medical necessity decisions to be made by doctors, rather than computers and claims adjusters," he said. Another goal is "to change the health care delivery system to make it fairer, more rational and more responsive to the needs of patients," according to Canfield. HMO officials said that there are currently processes in place to allow physicians to resolve payment disputes. In addition, HMO officials contend that doctors have "improperly jacked up" their claims for many services, the Journal-Constitution reports (Atlanta Journal-Constitution, 11/10).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.