For More Information Federal Judge Rules: Physicians Can Begin Collecting Evidence in RICO Lawsuit Against for-Profit HMOs Federal Court Ruling a Huge Victory for HMO Patients and Doctors

Lawyers representing over 700,000 doctors in a class action lawsuit against the nation’s largest managed care companies took steps this week to prohibit Cigna Health Care from circumventing the jurisdiction of the court where the class action suit is being heard.

The doctors’ class action suit was filed in May 2000 to combat widespread and chronic abuses by HMOs. The case, which is being heard by Judge Federico Moreno in a federal court in Florida, alleges that the HMO defendants violated civil racketeering (RICO) laws by using coercive, unfair, and fraudulent means to control physician-patient relationships.

In an attempt to avoid this class action suit, Cigna has engaged in a complex and questionable series of procedural maneuvers to settle another pending case being heard in Illinois federal court. If the proposed settlement is accepted by the court, it would preclude most of the pending claims against Cigna in the RICO case, as well as any other state court actions.

The Illinois case—which accuses CIGNA of bundling, downcoding, and arbitrarily denying claims—was brought by two physician plaintiffs, who, by virtue of class action laws, represent all other Cigna physicians across the nation. By some estimates, each participating Cigna physician could receive as little as $30 in the settlement. In order to get additional payment for disputed claims, physicians would have to fill out individual forms for each claim and send them back to Cigna for adjudication.

The settlement also forces Cigna to clearly disclose its payment policies, but does not require the plan to change those policies to fairly reimburse physicians in the future.

CMA and the medical societies from 18 other states have publicly condemned the proposed settlement. "An important part of what we’re fighting for is a long-term and significant change in the way these companies do business with the American people and their doctors," says Fred Merian, M.D., president of the Texas Medical Association. "The Cigna settlement comes up short in many ways."

For example, under the proposed settlement, Cigna would still be able to use financial criteria to overturn the decisions of the treating physician when it comes to determining whether a given course of treatment is medically necessary for a patient, as long as the company discloses those criteria publicly.

"Basically, they can still have their way with us, they just have to tell us what they’re going to do ahead of time," says CMA CEO Jack Lewin, M.D.

The medical societies that collectively voiced their opposition to the Cigna settlement represent more than 200,000 physicians across the country.

"The terms of this settlement are a giant step backward compared to the HMO reforms we can win through the anti-racketeering lawsuit that now represents a certified class of more than 700,000 doctors and other significant state court actions," said Donald Timmerman, M.D., representing Connecticut physicians. "This settlement, if allowed to stand, could significantly erode our ability to combat the abuses of the profit-driven managed care industry."

Lawyers for the plaintiffs in the RICO case have petitioned Judge Moreno to block the Cigna settlement and order that the Illinois case be part of the class action suit that is being heard in his court. In their filings, the attorneys said that Cigna’s conduct "amounts to nothing less than a deliberate, calculated attempt to flout [the court’s] orders, an insult to the dignity of the proceedings before the United States District Court for the Southern District of Florida, and a fraud on the Illinois Federal District Court." The judge is expected to rule on that request by Dec. 13.

Contact: Karen Nikos, CMA media relations manager, 213/630-1139 or knikos@cmanet.org.