A federal judge in Miami has certified a class of 600,000 U.S. doctors in litigation against large managed care companies, but he has denied the request of the plaintiffs lawyers to certify a second class that could have included as many as 145 million managed care plan members.
U.S. District Judge Federico Moreno issued an order arguing that the doctors seem to share enough concerns about fraud and racketeering to form a manageable class.
“Numerous issues are common to all claims and, in fact, predominate in this action,” the judge writes.
The judge cites allegations in a complaint filed on behalf of the doctors about the managed care companies use of medical necessity requirements, actuarial guidelines, automated claims systems, and tactics for delaying and denying claims as some of the issues relevant to questions about conspiracy.
But “this conditional class is subject to decertification” if the plaintiffs fail to prove, “even by circumstantial evidence,” that reliance on misrepresentations by the managed care companies injured the doctors, the judge adds.
The judge also ruled that the proposed plan member class is too unwieldy to make a good class.
“To the extent that there are common issues of law and fact, they do not predominate, and this case, if treated as a class action, would not be manageable,” the judge writes.
The ruling deals only with procedural issues and not with the merits of the plaintiffs allegations, but the judge writes extensively about evidence that managed care companies use of similar claims-processing systems and procedures could be evidence of the existence of a “common scheme” against the doctors.
The Law Offices of Archie Lamb L.L.C., Birmingham, Ala., the law firm of the lawyer serving as the co-lead counsel for the doctors, released a statement praising the ruling.
“The HMOs have long claimed that the doctors who have made these charges were basing their claims on isolated instances,” says Archie Lamb, the head of the firm, in the statement. “The granting of class-action status shows that the doctors charges against the HMOs of fraud and racketeering are consistent around the nation.”
But Karen Ignagni, president of the American Association of Health Plans, Washington, put out a statement of her own emphasizing Morenos decision to reject class-action status for the plan members.
“In the nearly three years already devoted to this case, resources have been siphoned out of the health care system by a fishing expedition that is based on unfounded and irresponsible legal theories advanced by the plaintiffs lawyers,” Ignagni says. “Todays ruling validates our contention that these lawsuits are without merit and should be dismissed. We now are hopeful that a similar dose of common sense will be applied to the second class-action track, which wrongly attempts to lump together individual issues between individual doctors and individual health plans.”
The trial lawyers, Ignagni adds, “are seeking a litigation surcharge which ultimately would be paid by consumers. In this era of rising health care costs, health plans and doctors agree that excessive litigation is not in the best interest of patients. It is time to stop this attempt by trial lawyers to cash in on the health care system.”
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.
The defendants in the cases are current or former units of Aetna Inc., Hartford, Conn; Anthem Inc., Indianapolis; CIGNA Corp., Philadelphia; Coventry Health Care Inc., Bethesda, Md.; Health Net Inc., Los Angeles; Humana Inc., Louisville, Ky.; PacifiCare Health Systems Inc., Santa Ana, Calif.; Prudential Financial Inc., Newark, N.J.; UnitedHealth Group Inc., Minnetonka, Minn.; and WellPoint Health Networks Inc., Thousand Oaks, Calif.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 7, 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.