Ruling Lets Doctors Proceed In Miami HMO Case
A federal judge in Miami Friday rejected eight insurance companies' motions for dismissal of 20 "wide-ranging" lawsuits by physicians, the New York Times reports. Judge Federico Moreno's ruling allows the plaintiffs to go forward, "pursuing their claims that eight of the largest companies broke their contracts with doctors and unjustly enriched themselves at the doctors' expense" (Freudenheim, New York Times, 3/3). The lawsuits, which were consolidated last year in Miami, claim that the insurance companies -- Aetna Inc. and its Prudential Unit, Cigna Corp., UnitedHealth Group, Humana Inc., PacifiCare Health Systems and WellPoint Health Networks -- "systematically delay and deny payment to health care providers even when care is medically necessary," and charge that these practices violated federal racketeering laws and the Employee Retirement Income Security Act, a 1974 federal law that regulates pension and health benefits (Chandler, AP/Miami Herald, 3/3). In a victory for the companies, Moreno initially rejected physicians' claims that the companies had "defrauded doctors" in violation of the anti-racketeering law. Moreno set a March 26 deadline for the plaintiffs to "try to substantiate" their allegations under the Racketeer Influenced and Corrupt Organizations Act. The judge also rejected the plaintiffs' claim that they were "entitled to more speedy payment under Medicare statutes," and gave the doctors until March 14 to make their arguments under a class action status.
Both sides said they were "encouraged" by Moreno's ruling, the Times reports. Aetna and Cigna issued statements saying they were "pleased" by the ruling. Cigna said, "Today's ruling is good news in that it rejects the plaintiff's claims regarding federal prompt payment issues and points out deficiencies in many other key areas." But California Medical Association President Dr. Marie Kuffner said, "Physicians and patients should be very encouraged by this ruling." Archie Lamb, the lead plaintiffs' lawyer, said that "neither side should claim a great victory" in the ruling (New York Times, 3/3). Reuters/Chicago Tribune reports that the ruling "partly helped" lift HMO stocks on Friday, with the Standard & Poor's Health Care Managed Care index rising 9.16 points, or 2.4%, to 393.70 (Somasundaram, Reuters/Chicago Tribune, 3/3).