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Supreme Court to review arbitration role in HMO suit

But a direct appeal of the decision about class action status is a bigger concern to the case.

By Tanya Albert, amednews staff. Nov. 11, 2002.

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The U.S. Supreme Court will review a lower court decision that found physicians who have contracts with PacifiCare Health Systems Inc. and UnitedHealth Group Inc. can be part of a class action lawsuit against HMOs even though there are arbitration clauses in their contracts.

The 11th U.S. Circuit Court of Appeals -- agreeing with the U.S. District Court, Southern District of Florida, Miami Division -- earlier this year said the cases do not have to go to arbitration because the language in the contracts doesn't govern the conspiratorial behavior that doctors accuse the health plans of engaging in.

But the two health plans appealed, saying that the court should enforce the companies' arbitration clauses. To not enforce the arbitration clause, they said, undermines the role of the Federal Arbitration Act.

"We are very pleased that the U.S. Supreme Court has agreed to review our case," PacifiCare executives said in a written statement. "PacifiCare has entered arbitration agreements with virtually all of our doctors as a means to achieve prompt and less expensive resolution of disputes to help keep down health care costs. The lower courts refused to enforce significant parts of our arbitration agreements. We firmly believe in the importance of arbitration as an efficient dispute-resolution vehicle."

UnitedHealth said it would not comment on the case, one of the dozens of physician and medical society cases from around the country that accuse the nation's largest insurers of violating the federal Racketeer Influenced and Corrupt Organizations Act. [...]