A New Skirmish In The Managed Care Wars

A new skirmish in the battle over managed care broke out last month when a New York medical association representing some 27,000 physicians filed a dozen lawsuits against six of the biggest health insurers in the state.

According to published reports in Newsday and The Wall Street Journal, the Medical Society of the State of New York charged the managed care firms with arbitrarily denying medically necessary health care, and wrongly slashing contractual payments to providers. The suits also claim that the insurers have inadequate staffing to deal with the volume of claims they are asked to handle, resulting in unsatisfactory service to providers and patients.

The doctor group also leveled a more qualitative accusation–that the named insurers had wrongly inserted themselves where they had no business being; namely, right in the middle of what one medical society official called the “holy doctor-patient relationship.”

The suits were filed against Aetna, CIGNA, Empire Blue Cross and Blue Shield, Excellus, Oxford, and United Health Group. Six of the suits filed in New York State Supreme Court ask the court to stop the disputed practices of the named managed care firms, while six other class-actions demand unspecified monetary damages.

These suits are not unique–indeed, they mimic claims filed in courts across the country. And as in past cases filed, the insurers named in the suits deny the allegations. Some industry officials contend that the suits are simply an attempt by greedy doctors to restore their ability to order whatever unwarranted tests and treatments they want, and charge whatever they wish.

But whatever the merits of these individual claims, the bottom line is that no one can honestly say the current system is working as it should.

The proliferation of such suits cries out once again for the only possible short-term solution–a federal patients’ bill of rights. The establishment of clear ground rules for managed care company conduct and a definitive dispute resolution system could make the system more workable for everyone.


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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