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Physicians’ group charges health plans with fraud
Posted
6-5-2000 Los Angeles. The California Medical Association has filed a federal class-action lawsuit against Wellpoint/Blue Cross of California, Health Net and PacifiCare, charging them with fraud and racketeering. The suit was filed in U.S. District Court under Racketeer Influenced and Corrupt Organizations (RICO) Act laws. The three for-profit health plans serve 9 million people – two-thirds of Californians covered by for-profit plans. In a press release May 25, the CMA charged the health plans with "imposing unfair contract terms, unnecessarily denying and delaying payments for procedures patients need, and reimbursing physicians at rates that are insufficient to cover costs," and said they used "coercive, unfair and fraudulent means to dominate and control physician-patient relationships for their own financial gain." Karen Nikos, CMA spokeswoman, said that all attempts to resolve these issues by other means had been unsuccessful, "so this lawsuit is a last resort." Recent meetings with the California Association of Health Plans (CAHP), which represents the companies, had not been satisfactory, Nikos said. In addition, physicians have been seeking legislation on both the state and national levels for exemption from antitrust laws, which would enable them to negotiate collectively with health plans in an effort to secure better terms. The federal bill, HR 1304, has stalled unexpectedly in the House, according to a press release by Rep. Tom Campbell, R-Campbell. The California legislation, SB 2007, has been amended to the point that it no longer is supported by the CMA, Nikos said. Bobby Pena, CAHP vice president of communications, said the association had proposed using a third-party mediator during the talks and that the RICO lawsuit did not seem to have legal merit. "The only people who will benefit [from the lawsuit] are the attorneys who will get the fees," he said. The CMA is suing for injunctive relief and not for payment for damages. "We just want wrongs to be righted," Nikos said.
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