Miami Judge Lets Managed Care Suits Proceed

NU Online News Service, Feb. 20, 6:06 p.m. – A federal judge in Miami has issued a ruling that lets consumers proceed with a bundle of lawsuits against six large managed care companies.

U.S. District Judge Federico Moreno today threw out many of the allegations in the lawsuits, but he allowed the plaintiffs to proceed with three types of claims dealing with the Employee Retirement Income Security Act, state insurance laws and the federal Racketeer Influenced And Corrupt Organizations Act.

• All remaining plaintiffs can proceed with claims alleging that “gag rules,” or other rules that interfere with efforts by members of employer-sponsored health plans to communicate with physicians, might violate ERISA by breaching the plans’ duty to act solely in the interest of plan participants.
• Plaintiffs who live in states that recognize a private cause of action for insurance fraud can proceed with RICO claims.
• Former plan members can proceed with claims alleging that plans have breached their fiduciary duty to plan members by using the term “medical necessity” in a way that conflicts with the definition stated in membership materials.
• The judge says current plan members have done a poor job of stating the claim that misuse of the term “medical necessity” is a breach of fiduciary responsibility, but he is giving them until March 20 to file amended complaints that do what he believes to be a better job of stating medical necessity claims.

The ruling deals only with procedural issues, and not with the merits of the plaintiffs’ allegations.

The court has posted the ruling on its Web site, at the bottom of its “Notable Cases” page, at http://www.flsd.uscourts.gov/default.asp?file=cases/index.html

The suits now being heard in Miami are part of a wave of suits filed around the United States starting in late 1999. A panel of federal judges transferred some of the cases to the Miami district court, which was already handling a similar case of its own, in October 2000.