HMO LAWSUITS: Aetna, Others Prepare for Battle
An anticipation of a coming wave of class-action lawsuits, Aetna Inc.'s Chair and CEO Richard Huber will meet with industry leaders and corporate customers to "develop a strategy for dealing" with the litigation, the Wall Street Journal reports. Huber said that a lawsuit against Aetna, the nation's largest insurer, "is almost inevitable" since "[t]rial lawyers go for deep pockets." In an effort to boost employee morale amidst talk of litigation and the recent drop in Aetna's stock price, Huber sent e-mails and "distributed a personal video," in which he vowed to "defend the company from the current 'assault.'" Attorneys preparing the lawsuits allege that HMOs are not delivering what they promise "because they tend to factor cost issues rather than focusing purely on medical need." Huber calls that premise "unfair" as managed-care companies "simply carry out the wishes of their customers, the employers." Huber said, "We're an administrator," adding that if "medical mistakes are made, it's the doctor's fault, not Aetna's" (Gentry, 10/6).
Old Defense Springing Leaks
Noting that HMOs' defense -- "claiming that the doctors in their system are private contractors" -- used to protect them from malpractice lawsuits is losing validity in the courts, Chicago Tribune columnist David Greising writes that the recent trend to sue insurers "could see HMOs paying out big buck settlements for creating a health care system that seeks cost containment over good health care, and control of doctors over the treatment of patients." While HMOs would "like their patients, and now the courts, to believe that they really don't control how care ultimately is delivered to the patient," Greising alleges that this stance "ignores the fact that the HMO payment system gives doctors a strong financial incentive to cut back on services." He argues that it also ignores the HMOs' "power to define 'medical necessity' in its own terms and force[s] doctors to follow suit." As a result of the recent Illinois Supreme Court ruling that allowed a woman's estate to sue her HMO for misdiagnosis, Greising concludes, "The HMOs need to consider the ... ruling as evidence that they must change the way they deal with doctors, and treat patients' needs as seriously as they watch their own bottom line" (10/3).
CT Doctors Sue
In a lawsuit filed yesterday in New Haven Superior Court, the Connecticut State Medical Society Independent Physicians Association alleges that Physicians Health Services, the state's largest HMO, has gone back on an agreement and has "interfered with the association's efforts to control the spending of its member doctors." The Hartford Courant reports that "millions of dollars in medical fees" are at stake, as payments to physicians have been withheld by PHS. According to the agreement, the withheld payments would be returned to physicians if they held their costs "within certain parameters." The suit charges that poor record-keeping and communication by PHS has "thwarted the association's effort to control costs." In addition, the association alleges that PHS overpaid a number of their physicians. Dr. David Thompson, the association's president, said. "They're not abiding by the terms of the contract." Chief Medical Officer at PHS Dr. Tim Moore said that the company is "working very hard to resolve the contractual issue and get [it] settled as quickly as possible" (Julien, 10/6).