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Apr 20, 1999
by Dan Haar and Fran Silverman
Aetna Facing Lawsuit
Racketeering Case May Be First Of KindA California consumer group filed a racketeering lawsuit against Aetna Inc. Monday, saying the nation's largest health insurer routinely makes widespread, false claims about the quality of its medical coverage.
The lawsuit, which further heats an already torrid battle about health insurance, is seeking class- action status on behalf of millions of Aetna HMO customers.
Between 1996 and now, the lawsuit said, Aetna "engaged in a nationwide fraudulent scheme designed to induce individuals to enroll in Aetna's HMO plan by representing that Aetna's primary commitment . . . is to maintain and improve the quality of care."
By contrast, the lawsuit said, Aetna's policies "severely intrude upon the physician-patient relationship and seriously restrict the ability of Aetna physicians to provide . . . high-quality healthcare."
Fred Laberge, a spokesman for Hartford-based Aetna, said the company would have no immediate response to the lawsuit.
But Aetna, which insures 22 million Americans, issued a list of policies and accomplishments aimed at showing it is committed to quality medical care -- including industry awards and research it has funded.
The Foundation for Taxpayer and Consumer Rights, which filed the lawsuit in U.S. District Court in Philadelphia, said the action is the first lawsuit against an HMO under federal racketeering statutes. Other experts, including Connecticut Attorney General Richard Blumenthal, who has brought rare racketeering lawsuits against medical providers, also said they know of no other similar case against an insurer.
At the heart of the issue is the foundation's assertion that Aetna's advertising and public relations statements have been false since Aetna took over U.S. Healthcare in 1996. Aetna, the lawsuit noted, has come under strong criticism from physicians, including the American Medical Association, for policies that critics say are overly restrictive.
The lawsuit comes three months after a jury in a California state court awarded $120.5 million when the widow of an Aetna-covered cancer patient said Aetna had blocked necessary treatment. Aetna has denied wrongdoing in the case, declining to offer a settlement, and vowed to appeal.
Aetna Chairman Richard Huber, in recent interviews and speeches, has said the key issue is about agreements and economics. He said Aetna meets its agreements under contracts with employers, who typically buy policies on behalf of workers. If workers want more coverage, Huber said, they should urge their employers to seek more comprehensive -- and costly -- plans.
But that isn't the issue in the lawsuit filed Monday, said Jamie Court, advocacy director for the foundation.
"This is about Aetna making promises high and low that patients are entitled to the highest- quality care," Court said.
The lawsuit, which does not detail the damages it is seeking, names three Philadelphia-area plaintiffs, but does not explain their cases. It relies on assertions that Aetna used thePostal Service and interstate commerce to back its argument that it is an organized crime case.
"The behavior here is akin to any other racket," Court said.
Some groups said Monday that the foundation might be partly motivated by its support from trial lawyers, who typically benefit in major corporate responsibility claims. Court, however, denied that the foundation's medical issues section is funded heavily by trial lawyers.
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