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Mar 16, 1999
CONTACT: Jamie Court - 310-392-0522 x327
Kaiser Sued For Fraud Over Mass-Market Advertising; Consumer Group Seeks To Take T.V. Advertisements Off Air
Doctors Not In Charge Of Care, As Ads ContendA first-of-its-kind lawsuit filed today by the Foundation for Taxpayer and Consumer Rights on behalf of Kaiser Permanente patients alleges that a $60 million per-year, mass-market advertising campaign by the HMO has recruited nearly one half million new members through wide-spread fraud.
The lawsuit, filed jointly by the Foundation and the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, seeks monetary and injunctive relief, including an order to remove the television ads from the air and to implement a corrective advertising campaign.
According to the complaint, the HMO advertises that only doctors, not administrators, make decisions at the HMO and that only medical need and independent medical judgment, not financial concerns, determine a patient's care at the company.
Among Kaiser's core advertising claims are "We don't have insurance administrators telling your physicians how to treat you. And there are no financial pressures to prevent your physician from giving you the medical care you need; No one but you and your doctor decides what's right for you; we don't have insurance administrators to stand in the way of giving our members the finest medical care available."
The lawsuit alleges that Kaiser, contrary to its advertising claims, has implemented systemic policies and practices based on monetary and profitability concerns that interfere with the unfettered medical judgment of Kaiser doctors. These policies include:
"This case should put every HMO around the nation on notice that they must do what they advertise and advertise what they do," said Jamie Court, advocacy director for the Foundation and director of the Foundation's Consumers For Quality Care project. "When an HMO recruits one half million members through outrageous claims that do not comport with its practices, the company must be held accountable."
The Foundation for Taxpayer and Consumer Rights is a tax-exempt, nonprofit, nonpartisan organization dedicated to advancing and protecting the interests of consumers and taxpayers.
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