Judge Allows Managed Care Organizations To Appeal Decision Permitting Patients To Sue Based on Racketeering Charges

U.S. District Judge Federico Moreno in Miami will allow a group of managed care companies that face lawsuits from health plan members for alleged fraud to "ask an appeals court whether they are open to racketeering claims, a move that lawyers for both sides said could speed a final decision," the New York Times reports. The plaintiffs in the case argue that the companies, which include Aetna Inc., Cigna Corp., UnitedHealth Group Inc. and Humana Inc., violated the Racketeering Influenced and Corrupt Organizations Act by "conspiring to withhold medical care and by not telling HMO members" that their doctors received financial incentives to control costs. Moreno ruled last month that the plaintiffs' attorneys, who have sought class-action status for the lawsuits on behalf of millions of health plan members, could proceed with the RICO claims. However, in a decision late Tuesday, Moreno "agreed with defendants that the RICO issue raised an important legal question, 'whether a managed care subscriber who has not actually been denied care can state a claim under RICO.'" Moreno said that the 11th U.S. Circuit Court in Atlanta could address the issue, which would "permit the parties to avoid unnecessary, protracted and expensive litigation" (Freudenheim, New York Times, 3/28). The AP/Nando Times reports that the RICO claims represent the "most significant part of the lawsuit because, if accepted by a jury, any damage award would be tripled" under provisions of that law. Susan Pisano, a spokesperson for the American Association of Health Plans, said, "We think it's a positive thing. This step opens up the possibility of another significant narrowing of the class-action suits that have already been significantly narrowed" (Wilson, AP/Nando Times, 3/27).