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HMO Suit Plaintiffs Avoid Arbitration

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A federal appeals court has helped doctors who are suing managed care companies over provider contracts.[@@]

The 11th U.S. Circuit Court of Appeals in Atlanta issued an order Friday that could prevent the managed care companies from forcing the doctors into arbitration.

The managed care companies have been trying to require the doctors to resolve many of their claims about contract problems, such as racketeering, through arbitration.

“Broad arbitration clauses cannot be extended to compel parties to arbitrate disputes they have not agreed to arbitrate,” U.S. Circuit Court Judge Stanley Birch Jr. writes in an opinion explaining the 11th Circuit order.

The ruling, which appears on the 11th Circuit Web site under the style Leonard J. Klay et al. vs. All Defendants et al., upholds an earlier ruling by U.S. District Federico Moreno of Miami.

The litigation affected was part of a wave of suits against health maintenance organizations and other managed care companies that were filed around the country 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.

Moreno, the U.S. District judge in Miami, moved in 2002 to certify a class that included a class of 600,000 U.S. doctors.

The doctors say the defendants have combined to force doctors to accept unfair provider contracts.

The 11th Circuit ruling, issued by a 3-judge panel, deals only with procedural issues and not with the merits of the plaintiffs’ allegations.

The managed care companies might be able to appeal the 11th Circuit ruling to the full 11th Circuit Court, or even to the U.S. Supreme Court. If the order stands, the doctors are hoping they will be able to use it to proceed with their case, according to a statement released by The Law Offices of Archie Lamb L.L.C., Birmingham, Ala., the law firm of the lawyer serving as the doctors’ co-lead counsel.

The current schedule calls for a trial to start in Miami in 2005.

The defendants in the doctors’ case are current or former units of Anthem Inc., Indianapolis; Coventry Health Care Inc., Bethesda, Md.; 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.

Aetna Inc., Hartford, and CIGNA Corp., Philadelphia, once appeared on the list of defendants, but they got out of the litigation by negotiating separate settlement agreements with the lawyers representing the physicians.

The Birch ruling is on the Web at //