Class-action status at risk in doctors' lawsuit against HMOs

Discovery could be halted while the 11th Circuit Court of Appeals in Atlanta reviews a lower court ruling on class certification.

By Tanya Albert, AMNews staff. Dec. 16, 2002.

In an expected move, a federal appeals court in November agreed to decide whether an estimated 600,000 physicians should have a stake in the outcome of lawsuits filed against the nation's largest health plans.

The 11th U.S. Circuit Court of Appeals in Atlanta said it would review U.S. District Judge Federico A. Moreno's September decision to grant class-action status to lawsuits physicians filed against Aetna Inc., CIGNA Corp., Humana Inc., Foundation Health Systems Inc., PacifiCare Health Systems, Prudential Insurance Co., UnitedHealthcare and WellPoint Health Networks Inc.

"This is a highly significant ruling and clears the way for the defendants to correct what we think is a manifestly erroneous class certification order before having to participate in a mammoth, costly and clearly unfair trial," said Brian Boyle, a lawyer with O'Melveny & Myers LLP in Washington, D.C., who is a member of the managed care companies' defense team.

Individual physicians nationwide and state medical societies filed lawsuits against the companies. The lawsuits accuse the companies of violating the federal Racketeer Influenced and Corrupt Organizations Act by breaching contracts and defrauding physicians.

The lawsuits -- in which physicians seek an unspecified amount of money and medical societies seek a change in the way HMOs do business -- also accuse the health plans of bundling, downcoding and arbitrarily denying claims to reduce what they paid to physicians. [...]