HMO LAWSUITS: Two Legal Firms Poised to Bring Charges in State
Two legal groups are expected to file class-action lawsuits against unspecified California HMOs as early as next week, the San Francisco Chronicle reports. Prominent San Francisco attorney Fred Furth confirmed he intends to bring actions at the state and federal levels, and San Diego-based law firm Casey Gerry Reed Schenk will lead the other reported charge. The moves are "patterned after" suits filed in recent weeks in other state and federal courts "by several legal groups dominated by law firms that earned huge fees from tobacco litigation." Valerie Kockelman, a widow asked by both groups to join the suits, said, "I know lawyers get an unconscionable amount of money but I think they do a real service. [M]aybe they'll win and somebody will notice." Furth is associated with the Scruggs law firm in Mississippi that "filed a class-action against Aetna Inc. earlier this month."
Timing, Timing, Timing
Despite the Supreme Court's January ruling that "insurance companies could be sued for fraud under the Racketeer Influenced and Corrupt Organizations (RICO) Act, if evidence showed that they misled policy holders ... Congress is still debating whether individuals can recover damages when they sue." And California's new state law will not make collecting "damages for pain and suffering" possible until 2001. Harvey Rosenfield, head of Santa Monica-based Consumers for Quality Care, said that the "current round of class-action suits against HMOs would not provide consumers the same protection proposed in the legislation now before Congress." He fears that managed care will use these suits to "claim they are already vulnerable" and prevent Congress from seeing a "need to change the [current] law," which only allows patients to sue "for the actual cost of some denied treatment." Rosenfield added, "Without the possibility of damages, you can't get a lawyer to take the case on a contingency fee" (Abate, 10/21).