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Doctors and medical societies file amended lawsuit against HMOs

Three state medical societies and a group of doctors have filed an amended lawsuit against a number of HMOs, alleging that they violated anti-fraud and racketeering laws.

"This is our Alamo."

The California and Texas Medical Associations, the Medical Association of Georgia, the Denton County Medical Society, and 20 individual physicians in Alabama, California, Colorado, Florida, Georgia, Kentucky, and Texas re-filed the suit March 26, 2001, in U.S. District Court in Miami. The plaintiffs allege that Aetna and its Prudential unit, CIGNA, Foundation, Humana, PacifiCare, United Healthcare, and WellPoint have violated the Racketeer Influenced and Corrupt Organizations Act (RICO), the Employee Retirement Income Security Act (ERISA), and federal and state prompt pay laws.

On March 2, 2001, U.S. District Judge Federico Moreno threw out the original lawsuit in response to a motion filed by the insurers. However, Moreno ruled that ERISA does not preempt the doctors' claims that the insurers breached their contracts with them.

The medical associations and doctors allege that the HMOs violate their agreements with doctors by reducing, delaying, and denying payments and reimbursements to providers by routinely "downcoding" claims submitted by doctors to reduce payments, and by concealing business practices such as offering incentives to doctors to limit their patients' medical care.

"This is our Alamo," says Dr. Jim Rohack, president of the Texas Medical Association, which joined the lawsuit when it was re-filed. "This is our last chance to halt these HMOs' predatory and destructive business practices that cannot be remedied through the well-worn paths to the legislature, the Congress, and the regulatory agencies."

Richard Koorsh, a spokesperson for the Health Insurance Association of America, says he was "disappointed" to see that an amended lawsuit was filed. "We believe that their case is without merit and we will prevail," Koorsh says.

The lawsuit seeks class action status. While it is not known how many people will be eligible for the class, the lawsuit states that the HMOs provide managed care services to more than 160 million subscribers. The HMOs have until April 30, 2001, to respond the amended lawsuit.

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