Major Suit Against Insurers Heads to Next Phase

A class-action lawsuit brought by 15 medical associations and more than 700,000 physicians against major health insurers will go to trial in September, according to presiding Judge Federico Moreno of the U.S. District Court in the Southern District of Florida, Miami Division.

The defendants named in In re: Humana Inc. Managed Care Litigation, which was filed in Miami in 2000, were Aetna, Anthem Blue Cross, Cigna Corporation, Coventry Health Care, Humana Health Plan, Pacifica Health Systems, United Health Group, and Well Point Health Networks. Cigna and Aetna are no longer part of the lawsuit, having settled last year with the plaintiffs for $540 million and $470 million, respectively (Psychiatric News, October 3, 2003; November 7, 2003).

The class of physicians consists of those who provided medical services insured by any defendant between August 4, 1990, and September 30, 2002.

The lawsuit alleges that the health insurance companies violated the federal Racketeer Influenced and Corrupt Organization (RICO) Act by unfairly denying or delaying payments for medical care. Specific allegations are that the companies “covertly manipulate, maneuver, and exploit long-standing accepted industrywide practices for financial gain, capitation payment schedules are founded on actuarially unsound principles and are manipulated by defendants to increase their profits at the expense of the physicians who provide medical services, [companies] systematically deny and delay payments due physicians and profit from the moneys wrongfully retained” (Psychiatric News, May 3, 2002; October 18, 2002).

Similar charges were filed by state medical associations against Blue Cross in a separate lawsuit in September. Last month the North Carolina Medical Society filed a similar lawsuit against the state’s Blue Cross and Blue Shield organization (see story below).

Leaders of state medical associations who joined the landmark lawsuit welcomed Moreno’s decision to proceed to trial.

Jack Lewin, M.D., CEO of the California Medical Association, remarked in a news release, “Judge Moreno’s order is very encouraging for all of America’s physicians. This case represents the beginning of a new and positive relationship between physicians and the nation’s health plans.”

John Allen, M.D., president-elect of the Texas Medical Association, remarked in the release, “This ruling confirms the entire basis on which this landmark case is founded. We look forward to moving ahead on behalf of our patients to correct the abuses of the managed care industry.”

Archie Lamb, co-lead counsel for the physicians, said in the release, “This ruling underscores the legitimacy of the physicians’ claims despite the industry’s attempt to stop the case from the beginning. The team of over 200 attorneys who represent the 700,000 physicians have been preparing to take this case to court.”

Moreno will now have to rule on an appeal by the defendants to break up the class-action lawsuit and settle a dispute over the trial’s location, according to a January 7 article in Modern Physician.

Moreno plans to ask a national panel of judges to decide whether he should remain in charge of the case after three years of pretrial supervision, according to the article.

More information about the lawsuit is posted on the Web site of the California Medical Association at www.cmanet.org and on a Web site by Lamb at www.hmocrisis.com. ▪