Three state medical societies join HMO racketeering lawsuit

Texas, California and Georgia medical associations band together against managed care. Court, they say, is their last resort to solve prompt-payment and medical necessity concerns.

By Tanya Albert, AMNews staff. April 16, 2001.

Three state medical societies that joined together to sue the nation's largest health insurers hope the weight of their more than 75,000 members underscores how widespread and serious physicians' problems are with managed care.

The Texas Medical Assn., California Medical Assn. and Medical Assn. of Georgia lawsuit filed in U.S. District Court in Miami accuses nearly a dozen health plans of violating federal racketeering laws.

The medical associations joined class action lawsuits by 20 individual doctors from seven states accusing managed care companies of denying medically necessary treatments, systematically delaying payments and bundling claims to keep money from physicians so the company could profit.

"Being part of a group ... gives strength and emphasis to the problems," said MAG Executive Director Paul Shanor. "It shows that doctors across the country are facing the same problems."

The medical associations' lawsuit is one of dozens that physicians and patients across the country have filed against managed care companies over the past 18 months. MAG and CMA earlier filed their own lawsuits against HMOs accusing them of failing to pay claims promptly and jeopardizing patient care. All of those lawsuits were consolidated in the U.S. District Court for the Southern District of Florida, Miami Division last year for pretrial hearings because they were so similar.

The most recent suit from the medical associations is in Miami, too. It was filed March 26, the same day the judge set as a deadline for physicians to rewrite their cases to more clearly substantiate their claims that HMOs had violated state prompt-payment laws and the federal Racketeering Influenced and Corrupt Organizations Act. [...]