HMO lawsuit could represent 50 million people
MIAMI, July 24 (Reuters) - A small group of HMO subscribers asked a U.S. judge on Tuesday to certify their fraud claims against the nation's largest managed care companies as a class action that could represent in excess of 50 million people.
Lawyers for the managed care companies, including Aetna Inc, the leading U.S. health management company and others, said allegations that they used financial incentives to limit medical care and failed to disclose those practices to patients must be tried as individual lawsuits, not in a class action.
U.S. District Judge Federico Moreno did not say when he would make the critical class-action ruling in a case lawyers said was probably the largest civil litigation pending in the United States.
In a daylong hearing attended by at least 100 lawyers in a packed Miami courtroom, attorneys for HMO customers in six separate lawsuits told Moreno that the cases deserved class action status because the HMOs made ``uniform, national representations'' that misled consumers about their health coverage.
In addition to Aetna, with some 19 million subscribers, the lawsuits named as defendants CIGNA Corp, Prudential Insurance, UnitedHealth Group Inc and Humana Inc.
The case has brought together some of the top legal talent in the country, including David Boies, who prosecuted the U.S. government's antitrust case against Microsoft and was Al Gore's chief combatant in the legal fight over the U.S. presidency, and Richard Scruggs, the Mississippi lawyer who led the 1998 settlement between the United States and the tobacco industry. Both are representing subscribers.
The plaintiffs allege the companies committed fraud by failing to tell customers they offered secret bonuses to doctors to deny certain types of health care to patients in favor of less costly diagnostic tests or treatments.
``They said things that are not true,'' Boies told Moreno. ``We have not said it's wrong to give incentives to doctors. We've said it's wrong to give bonuses to doctors to deny care, and then conceal it.''
But lawyers for the health care companies said they had clearly disclosed that they paid financial incentives to ``promote the delivery of health care in a cost-effective manner.''
They argued that the cases centered on what information was disclosed to individual subscribers by both the HMOs and by the subscribers' own employers. As a result, tens or hundreds of thousands of people would have to be interviewed, a prospect defense lawyers called ``unmanageable.''
``It makes your hair hurt, the thought that anybody could try a case like that,'' said attorney Jim Quinn, representing UnitedHealth Group.
Moreno questioned lawyers about whether such an unwieldy case -- which lawyers estimated could ultimately represent in excess of 50 million HMO subscribers -- could be broken down into ``sub-classes.''
``The whole issue is how different people have different knowledge,'' Quinn told Moreno.
``Surely you can group people in different categories?'' Moreno asked.
``You would have dozens and hundreds of groups,'' Quinn said, noting that UnitedHealth Group alone had 29 separate plans, many with their own sets of rules and regulations, in the United States.
``But you could do it?'' Moreno pressed.
``It would take decades. My grandchildren could be involved,'' Quinn said. ``It makes no sense.''
Moreno's court is the stage for a host of lawsuits filed about two years ago by patients and doctors against the embattled managed care industry.
He also has been asked to consolidate into a single class action the claims of an estimated 600,000 doctors who accuse the nation's largest health insurers of cheating on fees. The companies have argued in that case that the claims are too complex and varied to be lumped together.