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Life Health > Running Your Business > Certification

Supreme Court Lets HMO Provider Suit Continue

By Allison Bell

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A major class-action suit against 6 large managed care companies has moved a step closer to trial.[@@]

The U.S. Supreme Court declined Monday to review a dispute about whether the plaintiffs in the case, Leonard J. Klay, et al. v. UnitedHealth Group Inc., et al., really form a class that should have the ability to bring a class-action suit.

Lawyers for the doctors say Klay is the lead plaintiff in a class that consists of about 600,000 doctors who have done business with the managed care units of Health Net Inc., Los Angeles; Humana Inc., Louisville, Ky.; PacifiCare Health Systems Inc., Cypress, Calif.; Prudential Financial Inc., Newark, N.J.; UnitedHealth Group Inc., Minnetonka, Minn.; and WellPoint Inc., Indianapolis.

Lawyers for the plaintiffs say the managed care companies named as defendants have violated federal racketeering laws by conspiring to hold down doctors’ compensation and interpret provider contracts in unfair ways.

But the defendants and outside business groups question whether lawyers for Klay should have the right to represent a class consisting of hundreds of thousands of doctors.

Klay v. UnitedHealth is one of many managed care cases that have been consolidated in the U.S. District Court in Miami under the style In Re Managed Care Litigation.

U.S. District Judge Federico Moreno has certified a class of 600,000 doctors for the lawyers representing Klay, and the 11th Circuit Court of Appeals in Atlanta upheld certification of the class in September 2004.

Lawyers representing UnitedHealth and the other managed care companies turned to the Supreme Court for help in October 2004.

The U.S. Chamber of Commerce was one of the groups that filed briefs supporting UnitedHealth’s appeal.

The appeals court in Atlanta affirmed the certification of the 600,000-doctor class based on an analysis of whether the characteristics the doctors are supposed to have in common predominate over the matters that divide them, lawyers for the chamber write in their brief.

“This cramped analysis permitted a class certification based on generalized characterizations of the defendants’ representations and plaintiffs’ reliance ? for example, that defendants promised to ‘honestly pay physicians the amounts to which they were entitled,’ ? ? rather than a careful analysis of whether, in fact, common issues would predominate in the case,” according to the chamber lawyers.

The chamber lawyers argue that some U.S. courts’ moves to certify classes that are unworthy of class status expose U.S. corporations to the threat of unfair “blackmail settlements.”

The Supreme Court decided against using the current Klay appeal as a vehicle for exploring the rules governing certification of classes. The court included the Klay case without comment on a long list of cases that it will not be reviewing this term.

Supreme Court docket information for the case is on the Web at http://www.supremecourtus.gov/docket/04-522.htm

The U.S. Chamber of Commerce has posted a link to a copy of its brief at http://www.uschamber.com/nclc/news/alerts/ba041203b.htm

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