CMA, Now Joined by Texas and Georgia, Continues RICO Case Against For-Profit Plans
(03/29/01)
CMA, joined by the Texas and Georgia state medical associations, filed an amended complaint in March in its case against the nation's largest for- profit health plans.
The suit charges the plans with violating federal Racketeer Influenced and Corrupt Organizations Act (RICO) laws to defraud physicians, enrich themselves at physicians' and patients' expense, break contracts with physicians, and otherwise jeopardize patient welfare.
"While charging the plans with racketeering is clearly a drastic measure, we feel it is unavoidable because so many of our attempts to end these abuses have been largely futile," said CMA President Frank Staggers, M.D. "These plans have used financial criteria–not medical necessity–as the basis for coverage and treatment decisions, and for reimbursing physicians. For the sake of our patients and our members, we must do all we can to end this."
CMA filed its original suit last May, naming as defendants Blue Cross/Wellpoint, Foundation/Health Net and PacifiCare. The Texas Medical Association named CIGNA, Humana as defendants, while the Medical Association of Georgia named CIGNA, Coventry Health Care, United Healthcare, and Aetna and its Prudential unit.
CMA did not include Aetna in its initial racketeering suit against the three other for- profit health plans doing business in the state. CMA expects to continue its working relationship with Aetna U.S. Healthcare to address physician and patient concerns. The two organizations in December, 2000, released their "Preliminary Blueprint for a Productive Relationship" to guide this process.
Through the RICO suit, CMA and the other medical associations seek injunctive relief to stop the plans from denying and delaying adequate payment on legitimate claims for procedures that patients need, forcing doctors into contracts that fail to cover the cost of patient care, using financial criteria unrelated to patient care to deny claims, and providing incentives to claims reviewers to meet arbitrary claim-denial quotas.
A hearing to consider certifying the case as a class-action suit is scheduled for May in U.S. District Court in the Southern District of Florida.
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