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Suits accuse HMOs of racketeering
Posted
12-6-99 Washington. A high-powered legal team has filed a spate of new lawsuits against five of the country's largest HMOs, alleging the healthcare companies deny and limit coverage because of financial considerations. Mississippi attorney Richard Scruggs, who was part of the legal team that helped bring about the $220 billion tobacco industry settlement, is seeking class-action status on behalf of the 32 million members of PacifiCare Health Systems, Cigna HealthCare, Humana Inc., Prudential HealthCare, and Foundation Health Systems Inc. The suits allege that the HMOs are in violation of federal anti-racketeering laws because they provided financial incentives to member physicians who limited certain treatments, prevented those physicians from discussing certain treatment options, and limited patient access to specialists. Scruggs filed a similar suit against Aetna U.S. HealthCare in October. Spokespeople from each of the companies said the suits were an attempt by trial lawyers to profit at the expense of the average HMO member. Susan Pisano, vice president of communications for the American Association of Health Plans, said she has doubts the suits will achieve class-action certification. "There is no precedent under which these suits are being filed that we think would make them successful," she said. "In the short term, the plans need to expend resources in defending themselves. Even if we assume, as we do, that these charges are specious, they still need to defend themselves. I think the mistake is [that the trial lawyers think] that there are some deep pockets. The only deep pocket is the American public."
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