Doctor's suit against HMOs certified as class action; patients' class denied.

A federal judge in Miami has granted class action status in a suit filed on behalf of more than 600,000 doctors against several of the nation's largest HMOs. The suit, which includes allegations under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), claims the HMOs conspired to defraud doctors by violating payment contracts, changing billing codes, and systematically delaying payments.

"It's a great victory for doctors," said Archie Lamb of Birmingham, Alabama, co-lead counsel in the suit. "For the past 10 years, any time a doctor complained about the HMOs' business practices, they accused him or her of being a rogue or an outlier. This ruling says that the judge has heard both sides and said that these complaints have credibility and they ought to go forward."

In the same ruling, U.S. District Judge Federico Moreno denied class status to a suit filed on behalf of 145 million patients Covered by the HMOs, including Aetna, Cigna, Humana, Prudential, and United Healthcare. That suit alleges the insurers violated RICO by conspiring to restrict patients' access to care by financially penalizing physicians, Moreno determined that the patients' claims were not similar enough to be resolved in one trial because of numerous variations in plan documents and individual subscribers' coverage.

"However, the [doctors' suit] is different," Moreno wrote. "All defendants utilize computer software programs to process claims. Although there may be variations among the software used, defendants have not demonstrated that these variations were material. The [doctors' suit] also differs because individual subsidiaries and employers do not control the claims process, and the providers are not given various representations upon which they rely; instead, they claim the entire process is fraudulent." (In re Managed Care Litig., No. MDL-1334, 2002 WL 31154945 (S.D. Fla. Sept. 26, 2002).)

Both suits are part of federal multidistrict litigation (MDL) consolidated in the Southern District of Florida. The MDL also includes several state class actions and almost 50 individual cases. (In re Managed Care Litig., No. 00-1334-MD-MORENO (S.D. Fla. consolidated Oct. 23, 2000); Physician Suits Against HMOs Target Unfair Business Practices, TRIAL, Sept. 2002, at 16.)

At press time, the doctors' suit was in discovery and scheduled to go to trial next May. The defendants are appealing the class certification to the Eleventh Circuit.