A federal judge this week dismissed CMA’s RICO lawsuit against UnitedHealthcare and Coventry Health. In a summary judgment, U.S. District Judge Federico Moreno said that while the court does not condone the health plans actions, CMA and the other plaintiffs had not presented sufficient evidence that the plans had conspired with the other health plan defendants to underpay physicians. These were the last remaining defendants in CMA’s seven-year racketeering case. Judge Moreno in January granted summary judgment for PacifiCare, another of the defendants in this case.

CMA’s attorneys said they would appeal the ruling. The dismissal has no effect on the settlements with the other seven defendants.

“This is devastating news to all of the signatory state plaintiffs, because United Healthcare in particular has been a very difficult and obtuse performer in the marketplace for physicians,” says CMA CEO Jack Lewin, M.D. “But this ruling does not distract in any way from what we have already achieved with the seven health plans that settled.”

Judge Moreno in his ruling said that no reasonable juror could conclude that UnitedHealth and Coventry conspired with the other health plan defendants to unfairly downcode and bundle physicians’ claims. “Needless to say, we vehemently disagree with Judge Moreno,” says CMA General Counsel Catherine Hanson. “There is no way one managed care plan alone could have gotten away with the unfair payment system perpetrated by this industry on physicians. Had there been one corrupt payor, physicians would have simply terminated their contracts with that payor.”

Seven of the 10 HMO defendants in the case had previously settled and agreed to pay a combined $585 million in monetary damages—with about two thirds going directly to physicians. But of even greater value are the binding commitments by these companies to provide an unprecedented level of transparency and fairness in their future payment practices and other business dealings with physicians for a minimum of four years. These prospective commitments have been valued far in excess of the monetary relief—at well over $1 billion.

The settling health plans also funded with more than $100 million two physicians’ foundations that will support ongoing study and research to benefit physicians and physician practices nationwide. In addition, money from the Prudential settlement will fund the Physicians’ Advocacy Institute, a national nonprofit organization that fights managed care abuse.

For more information on CMA's RICO lawsuit, see the RICO Resource Center.

Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.