With one lawsuit against Big Tobacco under way in Minnesota, two of the state's largest hospital-affiliated HMOs, including one that lost nearly $3 million in 1996, announced plans last week to file another.
The lawsuit, expected to be filed late Friday, may be the first sign that providers want a piece of any multibillion-dollar tobacco settlement directly rather than waiting for it to trickle down through Medicaid or any community health programs.
The new plaintiffs are Bloomington-based HealthPartners and Minneapolis-based Medica Health Plans.
The suit was expected to name more than six companies, including Philip Morris and R.J. Reynolds, along with a public relations firm the health plans allege contributed to a "misinformation campaign."
The suit, which was to be filed in state court in St. Paul, seeks to recoup an unspecified sum for healthcare costs related to smoking.
Medica, a subsidiary of Allina Health System, has 1.3 million enrollees, and HealthPartners has about 800,000.
According to the Minnesota Department of Health, Medica reported a net loss of almost $2.9 million in 1996 on total revenues of more than $1.2 billion, while HealthPartners posted HMO net income of more than $7.5 million on total revenues of more than $893 million. Last year's results aren't available yet.
The health plans said they opted to file the lawsuit now because of new information emerging from a tobacco trial under way in St. Paul. That trial involves a 1994 lawsuit filed against tobacco companies by the state attorney general and Blue Cross and Blue Shield of Minnesota.
HealthPartners and Medica cite information in the Blues' trial, which alleges that tobacco companies targeted teen-agers as potential smokers.
"Because they have brought so many documents to light, it really does set a moral imperative for others to take some action," said Sarah Stoesz, an Allina spokeswoman.
The latest lawsuit may be the first in the country brought by health plans that are part of larger healthcare organizations with provider components. In addition to its clinics, HealthPartners has one hospital in St. Paul. Allina, formed in 1994, owns or operates 19 hospitals, according to the American Hospital Association.
The lawsuit also will be only the second one filed by a health plan since the Minnesota Blues filed its lawsuit, said Richard Daynard, a law professor at Northeastern University in Boston and chairman of the Tobacco Products Liability Project. His group is a public health advocacy group that encourages lawsuits against tobacco companies as public health strategy.
"We've been waiting four years for the next shoe to drop," Daynard said.
He said bringing a case against the tobacco industry is easier now because other lawsuits and settlements around the nation have produced mountains of documents.
Congress is considering national tobacco settlement legislation worth an estimated $368.5 billion over 25 years. Tobacco-related illnesses are estimated to add $20 billion a year in costs to federal health programs (Feb. 23, p. 26).
According to a recent report in USA Today, a new Centers for Disease Control and Prevention study says about one-seventh of the Medicaid budget -- or $13 billion -- is spent on smoking-related diseases.