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A federal appeals court has upheld a two-pronged ruling by U.S. District Judge Federico Moreno of the Southern District of Florida in a lawsuit against some of the nation’s largest health insurers. The 11th U.S. Circuit Court of Appeals in Miami agreed Thursday with Moreno’s ruling that doctors who have signed contracts with managed health care companies must arbitrate any disputes they have with the HMOs if the contracts included arbitration clauses. But Moreno also held, and the appellate panel agreed, that the doctors’ claims under the Racketeer Influenced and Corrupt Organizations Act and their allegations against the insurers of conspiracy and aiding and abetting should be allowed to proceed in federal court. Doctors from seven states, represented by several state medical associations, allege they were victims of a health insurance industry conspiracy. They contend that the insurers engaged in a “pattern of racketeering activity” designed to deny medically necessary care to patients while at the same time enriching themselves by, among other things, underpaying or delaying payments to doctors. The plaintiffs hope to win certification for a nationwide class that could include as many as 600,000 doctors. Plaintiffs’ lawyers also are seeking class certification for millions of health plan subscribers in a related federal lawsuit against health insurers. The appellate ruling means that individual doctors who have signed contracts with particular health plans which are defendants in the suit must arbitrate their claims against those plans. But doctors are not required to arbitrate their claims against defendant health insurers with which they don’t have a contract. Lawyers for the HMO industry argued before the appellate court in January that because of their contracts, the doctors are obligated to resolve their payment dispute with the health plans through arbitration. The insurers’ lawyers argued unsuccessfully that even doctors who don’t have contracts with particular health plans should still be required to arbitrate their claims. Moreno had listed three broad conditions under which the arbitration requirement did not apply. Humana, UnitedHealthcare, Prudential and other insurers appealed in an unsuccessful effort to widen the arbitration requirement. The health insurance companies contend that the lawsuits are little more than an effort to “dismantle” the managed care system that was created to make health care costs more affordable. Thursday’s ruling clears the way for the RICO, conspiracy and aiding and abetting claims, as well as a variety of other claims against the insurance companies to move forward. Moreno hasn’t ruled yet on the class action certification request.

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