Consumer Group Sues Aetna Inc.

Published on

San Diego Union-Tribune

Consumer health care advocates opened a new front against HMOs yesterday by joining in a suit against the nation’s largest health care provider, Aetna Inc., for racketeering.

The lawsuit claims Aetna attracted potential customers by saying it was dedicated to quality medical care. Instead, the lawsuit alleges, the company encourages systemwide cost-cutting that contradicts that claim and undermines the quality of health care.

The Santa Monica-based Foundation for Taxpayer and Consumer Rights is teamed in the suit with San Diego-based law firm Milberg Weiss Bershad Hynes & Lerach. Filed in Philadelphia, it is the first lawsuit against an HMO under a federal anti-racketeering law.

Last month the foundation filed a California class-action suit against Kaiser Permanente, the state’s largest health maintenance organization. The group accused Kaiser of false advertising that promises medical care unhindered by financial considerations.

Jamie Court, advocacy director for the foundation, said Aetna‘s practices rise to the level of racketeering under the law because of the systemic nature of its wrongdoing. Aetna‘s advertising, Court said, tells consumers that the company is committed to providing the highest quality care but he said their directive to those who provide the care implies something else.

“They define medical necessity as providing the least costly alternatives,” said Court. “What this lawsuit will decide is whether an HMO like Aetna can define quality as any business practice it chooses.”

For one thing, the lawsuit says, Aetna undermines medical care, in part, by offering financial incentives to doctors who see more patients and penalizing doctors who do not.

The suit was filed by Joseph and Jo Ann Maio of Philadelphia and Gary Bender of suburban Philadelphia on behalf of nearly 6 million people who enrolled or renewed membership in the Aetna HMO from July 1996 to the present. The lawsuit seeks unspecified monetary damages and asks that Aetna stop misleading customers.

Aetna declined to comment on the suit but issued a news release detailing a number of initiatives it has undertaken that purportedly support the provision of quality care.

A series of Supreme Court rulings in the past year has permitted broad use of the Racketeer Influenced and Corrupt Organizations Act, or RICO, a law originally aimed at mobsters, and allowed lawsuits by anyone allegedly harmed by a pattern of illegal activities. The law has been invoked to accuse numerous huge corporations of racketeering.

Aetna should no longer be able to advertise and represent that they are primarily committed to quality, when in fact they have systems in place that eviscerate quality medical care,” Court said.

Consumer Watchdog
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