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A massive lawsuit against the nation’s largest managed-care insurers, filed by doctors who say they’ve been defrauded, should be certified as a class action because individual suits can’t remedy a nationwide problem, lawyers for the doctors argued Monday. “A busy doctor can’t handle litigation against these people,” said Harley Tropin, a lead lawyer for the doctors. “We can’t go to state court 125,000 times.” Dozens of lawyers from around the country faced off Monday in Miami before U.S. District Judge Federico Moreno at the class certification hearing. The hearing was a crucial step in the plaintiffs’ attempt to bring a class action lawsuit against 10 HMOs on behalf of 600,000 doctors. Lawyers David Boies and Richard Scruggs of Big Tobacco fame, along with a cadre of other class action gurus, filed suit against the big managed-care insurers last year; the Multi-District Litigation Panel in Washington, D.C., sent the massive suit to Miami. The suit was split into two tracks — one for subscribers, who number as many as 80 million, and one for providers, made up of 600,000 doctors. A class certification hearing has not yet been held on the subscriber track. The doctors allege that the 10 major managed-care insurers — including Aetna Inc., Cigna Corp., Humana Inc., Foundation Health Systems Inc., Pacificare Health Systems, United Healthcare, Wellpoint Health Network and Coventry Corp. — systematically delayed payments, automatically “downcoded” fees and engaged in civil conspiracy and violations of the Racketeer Influenced and Corrupt Organizations Act. Tropin argued that handling the litigation through a myriad of individual lawsuits and fines against HMOs by the Florida attorney general, Texas attorney general, the state of Georgia, and the Maryland insurance commissioner is “piecemeal” and “not effective.” Such an approach, he said, “doesn’t get compensation back to the doctors. These agencies can’t stop what is obviously a nationwide problem.” He said that representatives from state medical associations in California, Texas and Georgia, who were present in the courtroom, supported the class action suit. In response to Moreno’s question of whether the class might be too large, the plaintiffs’ lawyers argued that several other huge class action lawsuits have moved forward, including a case filed by thousands of gas station operators against Exxon (which the plaintiffs recently won) and one presided over by Moreno involving a securities Ponzi scheme. Plaintiffs’ lawyers repeatedly cited the latter case, which was filed by a group of Canadian investors called the Walco Group in 1993. Tropin was named receiver in that case. In response to briefs filed by the defendants asserting that it would be too difficult to ascertain damages in a massive class action, Tropin reminded Moreno, “In Walco, they said, ‘You can’t prove damage,’ and you had no trouble getting rid of that argument. You said, ‘It’s what they stole.’ “ But the HMO lawyers were ready to counter that argument, maintaining that this case is far different from a Ponzi scheme. Defense attorneys outdid the plaintiffs in high-tech exhibits. They showed videotapes of doctors’ depositions in which the doctors were asked if they bill too much. “Nobody is in the same situation as me, so I don’t know how to evaluate that,” said one doctor. The defense lawyers also displayed maps showing very different “prompt pay” statutes around the country. These statutes set time limits for HMO payment to providers. In Georgia, the doctors must be paid in 15 days, for example, and in Nevada, in 60 days. In Florida, doctors must be paid in 45 days. In addition, Aetna has 22,000 different fee schedules and 200 different doctor practices, lawyers for the company pointed out. The point of the defense’s entire demonstration? That each case, each doctor and each provider contract is different — and a class action lawsuit is not an appropriate way to resolve these disputes. “Over 90 percent of claims are paid as submitted,” said John Harkins, one of the HMO lawyers. “How do you know we’re systematically denying claims?” Defense attorneys also informally challenged Aaron Podhurst’s involvement in the case. While filing no formal motions on the matter, they suggested to Moreno that Podhurst might have a conflict of interest in serving as lead counsel on both the subscriber and provider tracks. For example, if a subscriber had a billing disagreement with his or her doctor, the doctor might try to convince the subscriber to blame the HMOs instead, contended Ed Soto, one of the defense attorneys. But Podhurst vowed to withdraw from any issues involving a conflict. Some observers speculated the conflict allegation was designed by the defendants to push Podhurst, a respected litigator, out of the case.

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