HUMANA: Lawsuit Alleges Insurer ‘Misled’ Members
Signalling the beginning of a wave of litigation aimed at HMOs, a team of lawyers yesterday filed suit against Humana Inc. in U.S. district court in Miami, alleging that the insurer, "pays bonuses to claims reviewers and doctors to limit medical coverage" without revealing the incentives to its patients (Appleby, USA Today, 10/5). The suit, filed on behalf of five patients in Texas and Florida, is seeking class- action status and triple damages under the RICO anti-racketeering statute (Bloomberg/Los Angeles Times, 10/5). Plaintiffs contend that they did not receive coverage as portrayed by Humana "because the company did not disclose incentives to doctors to deny care." Plaintiffs' attorneys assert that there was a "breach of trust," since patients thought treatment decision were made solely on medical guidelines rather than the bottom line (Freudenheim, New York Times, 10/5). In addition, the 70-page complaint charges that Humana did not disclose that claims reviews were being made by people "without appropriate medical training and specialization" (Chandler, Miami Herald, 10/4). Plaintiffs' attorney Joseph Sellers contends that Humana violated the Employees Retirement Income Security Act (ERISA), which requires plans to "disclose information on benefits to patients, including how benefit decisions are made" (Florida Times- Union, 10/4). Officials for Humana, which provides coverage to more than 6 million people, said that they could not comment since they had not received a copy of the suit, but warned that they will plan a "vigorous defense" (Galewitz, AP/Nando Times, 10/5).
Good Timing or Gold Digging?
CNN's Eileen O'Connor reported that the attorneys who brought the suit are the very same "who sued Big Tobacco and won" ("Inside Politics," 10/4). Attorney David Boies of Boies & Schiller is also "spearheading the federal government's action against Microsoft Corp." Along with his firm, the suit was filed by attorneys from Washington, D.C.-based Cohen, Milstein, Hausfeld & Toll (McGinley, Wall Street Journal, 10/4). At a news conference yesterday, attorney Stephen Neuwirth said, "This is the first case that has uncovered specific detailed examples of how a health care company ... covered up from its subscribers the true way it decided whether to approve treatment and whether to pay claims of its subscribers" (Egan, Reuters/Boston Globe, 10/5). The first-of-its-kind lawsuit, comes at the same time that the House of Representatives debates whether to give patients the right to sue HMOs for damages. O'Connor reported that the attorneys "say it's the first of many such suits -- added pressure as the House considers whether to pass a so-called 'Patients' Bill of Rights'" ("Inside Politics," 10/4). However, attorney Joseph Sellers denied that the lawsuit had anything to do with the action at the Capitol (Florida Times-Union, 10/4). Legal experts say the lawsuit faces many obstacles, foremost among them proving that any patients were actually harmed (USA Today, 10/5).