MANAGED CARE: Court Rules Against Incentives Disclosure
Five Texas HMOs won a federal court appeal in New Orleans Tuesday, as the panel dismissed a lawsuit that would have required the plans to disclose financial incentives paid to doctors, the Dall as Morning News reports (Yung, 1/5). The defendants named in the filing are Aetna, NYLCare Health Plan, Kaiser Foundation Health Plan of Texas, Prudential Health Plan, and CIGNA HealthCare of Texas (Levick, Hartford Courant, 1/5). The court ruling is a "victory for HMOs," which have recently been barraged with numerous class action lawsuits by consumers. David Simon, chief legal officer of Aetna, said, "This federal appellate decision rejecting a failure to disclose [financial incentives to doctors] is yet another blow to the viability of the recent class actions brought against HMOs." George Parker Young, an attorney representing the eight plaintiffs in the lawsuit, said the appeals court should have waited for the outcome of a U.S. Supreme Court case concerning the same issue before releasing its findings. "We are disappointed. We are hopeful of a good opinion (from the U.S. Supreme Court)," he said. Young added that he will ask the appeals court to reconsider its decision and may refile the suit using different legal argumentation (Dallas Morning News, 1/5).
At issue in the case is whether the HMOs had violated the Employee Retirement Insurance Security Act (ERISA) by not disclosing monetary incentives given to doctors. The federal law requires insurers to disclose to patients any financial arrangements with doctors for certain employer health plans that ERISA regulates. The plaintiffs in the case argued before the court that the insurers "breached their 'fiduciary' duty to act only in the interests of members" (Hartford Courant, 1/5). As a result, the financial incentives "hurt patients by 'causing physicians to keep usage of health care, referrals and testing to a minimum'" (Dallas Morning News, 1/5).