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Akron Univ. School of Law

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Sunday, February 5, 2006

Physicians' Class Action Against Pacificare Dismissed

As reported by Modern Healthcare's "Daily Digest" (Feb. 4):

A federal judge in Miami dismissed charges against PacifiCare Health Systems, Cypress, Calif., in a class-action racketeering lawsuit alleging that the nation's largest health insurers systematically shortchanged up to 900,000 physicians. U.S. District Judge Federico Moreno ruled in a summary judgment that there was no evidence that PacifiCare, which was acquired by UnitedHealth Group in December 2005, conspired with other insurers to underpay physicians or that it aided alleged violations of the Racketeer Influenced and Corrupt Organizations Act. "Indeed, some of the plaintiffs' recent descriptions of the alleged conspiracy are so general that they would include much legal conduct, such as innocuous efforts to reduce costs," Moreno wrote. "By definition ... managed-care systems seek to reduce costs in the delivery of medical care."

Physicians and medical associations sued 10 major publicly traded HMOs in 1999, alleging that the companies conspired to use computer software to delay, deny or reduce reimbursements. All but two of the insurers reached multimillion-dollar settlements out of court without admitting wrongdoing. The remaining defendants, UnitedHealth and Coventry Health Care, are scheduled to seek summary judgment before Moreno March 14. The trial in the case, delayed several times over the years, is scheduled for September.

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