Supreme Court rejects HMOs appeal in MD suit

The U.S. Supreme Court refused on Monday to review the class-action status for a lawsuit on behalf of more than 600,000 doctors claiming six managed-care companies violated federal racketeering law by regularly underpaying them for medical services.

Without comment, the justices rejected an appeal by the HMOs and let stand a ruling by a U.S. appeals court that allowed the class-action lawsuit to proceed to trial before a federal judge in Miami.

The lawsuit claimed the defendants conspired with each other to program their computer systems to systematically underpay physicians for their services. The lawsuit covered claims submitted by doctors between 1990 and 2002.

The defendants are Health Net Inc.; Humana Inc.; PacifiCare Health Systems Inc.; a unit of Prudential Financial Inc.; UnitedHealth Group Inc.; and WellPoint Health Networks Inc.

The HMOs argued to the Supreme Court that the Atlanta-based appeals court used the wrong standard in upholding a judge’s decision to give the lawsuit class-action certification.

They claimed the appeals court should have conducted a more rigorous analysis by carefully reviewing the evidence rather than just accepting the plaintiffs’ allegations as true.

The HMOs said the standard used by the appeals court “invites frivolous class actions and creates extraordinary settlement pressures in cases that should not be certified.”

Two managed care companies, Aetna Inc. and Cigna Corp., already have settled with the plaintiffs. Attorneys for the plaintiffs urged the Supreme Court to reject the appeal by the HMOs.

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