Fw: HMO Battles cont.

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Martha Murdock, DirectorNational Silicone Implant FoundationDallas, Texas Headquarters

----- Original Message ----- From: MARTHA

Cc: ParfumGigi@...

Sent: Tuesday, May 08, 2001 12:43 AM

Subject: HMO Battles

FYI

Tuesday | May 8, 2001

Doctors, HMOs to begin legal brawl Hearing on class-action status likely to be only the first of several rounds 05/06/2001 By Mark Curriden and J.C. Conklin / The Dallas Morning News Doctors and health insurance companies will square off in federal court Monday in Miami over who should determine medical treatment of patients. Lawyers representing 80,000 physicians from Texas, California and Georgia are asking a federal judge in Miami to let them sue the nation's largest health maintenance organizations in one big class-action suit instead of thousands of individual cases.

The physicians say that the eight major HMOs – Aetna Inc., Cigna Corp., Humana Inc., Foundation Health Systems Inc., PacifiCare Health Systems, United Healthcare and Wellpoint Health Networks – illegally profited by improperly delaying and denying reimbursement of health care costs and by fraudulently rejecting expensive but necessary medical treatments.

The HMOs say that the doctors' allegations are "wholly devoid" of evidence. They are asking the judge to throw out the case entirely or at least force the physicians to prove their claims on a case-by-case basis.

The hearing Monday is the first roadblock the doctors say they must overcome to regain their control over health care in America.

"The stakes in this litigation are huge; nothing short of the future of the nation's health-care system is at issue," said Emory University law professor Vandall.

But most legal experts agree that although public opinion is against the HMOs, the physicians face an uphill fight under the law.

"Tort law is stacked in favor of the insurance companies," Mr. Vandall said. "In order to prevail, the doctors have to leap a series of legal hurdles that are very high."

If their lawsuit survives and the case makes it to a jury, he said, the HMOs are in big trouble.

"The odds are the doctors' case will be thrown out before it makes it to a jury," said Newton, Texas Tech School of Law dean.

"But if somehow the case stays alive and the doctors get to present their case to a jury of 12 people, the odds turn very quickly against the insurance companies, who would then face billions and billions of dollars in damages."

Class action or not?

The physicians face the first hurdle Monday in U.S. District Judge Federico A. Moreno's courtroom. Their lawyers need the judge to approve their lawsuit as a class action, which would allow them to proceed collectively against all the HMOs in one national trial.

To do so, the doctors must show that the alleged improper conduct of the eight HMOs was done as part of a conspiracy.

The physicians must also prove that the actions of the HMOs caused the doctors similar injuries.

"This case is not about the claims of 80,000 individual doctors," said Alabama lawyer Archie Lamb, who represents the physicians. "This case is about how the HMO industry mistreated all the doctors in the very same way, causing them to suffer in roughly the same way."

The suit alleges that the insurers conspired to develop an illegal scheme to defraud doctors of hundreds of millions of dollars in medical reimbursements.

The suit also charges that the HMOs deceived physicians and patients by publicly claiming that they make decisions based on medical necessity when they actually approve coverage based on costs.

Those reasons combined, Mr. Lamb said, is why the case is perfect to be handled as a massive, national class-action lawsuit.

No collusion, say HMOs

The insurance companies adamantly disagree. Lawyers for the HMOs deny there has been any collusion between the companies. They argue that the contractual relationship between each of the eight HMOs and the 80,000 physicians "varies significantly," with each insurer developing different fee arrangements with each individual physician.

"To say that the defendants schemed to review all claims in the same manner is nothing short of pure fantasy," Aetna lawyers say in written documents filed with the judge.

Lawyers for the insurance companies point out that the federal courts have been looking more critically at big class-action lawsuits in recent years.

They point to the tobacco litigation, in which smokers initially tried to sue the cigarette makers in one huge national trial.

However, the federal courts rejected the class-action suit because they said the injuries sustained by the smokers varied too much.

That being said, legal experts say the physicians may be able to leap this hurdle because their claims against the HMOs are so similar.

More hurdles

Even if the doctors are allowed to proceed together, two other major hurdles still lie ahead – both possibly more difficult to clear, according to legal experts. The physicians must show that federal law allows them to bring such a lawsuit.

In court papers filed last week, the insurance companies asked the judge to throw out the entire case because federal law specifically prohibits such cases against HMOs.

The insurers are also asking the federal appeals court in Atlanta to stop the lawsuit, saying that the physicians signed contracts agreeing that any financial disputes would be handled by private arbitrators and not through litigation.

"Recent court decisions rejecting legal claims against HMOs put this case on a very short leash and almost impossible to be successful," Emory's Mr. Vandall said.

"It will be a miracle if this case survives. But they said the same thing about the tobacco cases, too. And the tobacco industry ended up paying out monster sums of money."

Martha Murdock, DirectorNational Silicone Implant FoundationDallas, Texas Headquarters