Miami Judge Keeps Managed Care Suits Alive

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A federal judge in Miami is letting consumers proceed with lawsuits against six managed care companies.

U.S. District Judge Federico Moreno threw out many allegations in the suits, but he kept claims dealing with the federal Employee Retirement Income Security Act, which governs many employee benefit plans, and the federal Racketeer Influenced And Corrupt Organizations Act, which lets plaintiffs collect extra damages from criminal enterprises.

All plaintiffs can proceed with charges that “gag rules,” or limits on doctors telling patients about plan financial incentives, violate ERISA, by breaching plans duty to act in participants interest. If an effort to suppress the information exists, it “is wholly incompatible with the spirit of proper plan administration,” the judge writes in his ruling.

Plaintiffs in states that recognize a private cause of action for insurance fraud can proceed with RICO claims, the judge ruled.

Former plan members can proceed with claims alleging that plans have breached fiduciary duty by using the term “medical necessity” in a way that conflicts with the definition given in membership materials. The judge says current plan members have stated medical necessity claims poorly but can restate the claims.

The ruling deals only with procedural issues, not with the merits of the suits.

The Miami suits are part of a wave of suits filed around the United States starting in late 1999. A panel of federal judges transferred some to the Miami court, which was already handling similar litigation, in October 2000.

The plaintiffs lawyers are seeking permission to represent large classes of doctors and consumers.

The defendants are units of Aetna Inc., Hartford; CIGNA Corp., Philadelphia; Health Net Inc., Los Angeles; Humana Inc., Louisville, Ky.; Prudential Financial Inc., Newark, N.J.; and UnitedHealth Group Inc., Minnetonka, Minn.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 25, 2002. Copyright 2002 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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