California doctors on Thursday launched their broadest legal assault yet on managed care, accusing three of the biggest HMOs of conspiring to keep doctors' fees low, lying to doctors and patients about the quality of care members would receive, and attempting to illegally insert themselves into the doctor-patient relationship.
In a lawsuit filed in U.S. District Court in San Francisco, the 30,000-member California Medical Assn. claimed that Blue Cross of California, PacifiCare Health Systems Inc. and Foundation Health Systems Inc. violated the federal Racketeer Influenced and Corrupt Organization Act, using their power in the marketplace to fraudulently deny or delay payments to doctors, and improperly violate the relationship between doctors and patients--all for monetary gain.
The health plans said they were surprised by the suit because it was filed just as their trade organization was setting up a series of meetings with physicians and hospitals to work out payment issues.
The doctors' suit, while certainly not the first by physicians against health maintenance organizations, signals a marked escalation in the HMO wars just in time for November's presidential election. The CMA is among the most influential physicians groups in the country.
But experts questioned whether this suit and similar suits filed by groups of patients can survive legal challenges. A racketeering suit against Aetna U.S. Healthcare filed on behalf of consumers was dismissed as "flawed" last year in federal court in Philadelphia.
"We've tried everything else," said CMA President Marie Kuffner, whose organization has been rebuffed by two state courts, the state legislature and state regulators in its efforts to force health plans to increase the amount of money they pay to doctors. "We've tried in several arenas and all of it has failed."
Instead of a monetary award, the suit asks for the near-dismantling of managed care, calling on the federal courts to outlaw or regulate a host of common practices, including:
* Regulations on how and when a patient can be referred to a specialist.
* Quality-assurance programs and audits.
* Drug formularies, which prohibit or discourage doctors from prescribing certain expensive drugs.
* Monthly per-patient budgets, made up of so-called capitation payments, which do not fully cover the cost of providing care to all patients.
* Guidelines that determine whether a procedure or test is medically necessary.
