Add false advertising charges to the legal challenges facing HMOs.
The Santa Monica, Calif.-based Foundation for Taxpayer and Consumer Rights last month filed a class-action suit against Oakland, Calif.-based Kaiser Permanente, charging that the HMO's "In the hands of doctors" multimedia campaign is false advertising. The suit, filed on behalf of Kaiser patients, seeks monetary and injunctive relief, including a demand to remove the ads from the air and implement a corrective advertising campaign.
According to the complaint filed in San Francisco Superior Court, Kaiser advertises that doctors, not administrators, make decisions at the HMO. In reality, the complaint continues, company policies and practices based on monetary concerns interfere with doctors' ability to provide care. The policies include shifting medical procedures from physicians to less-trained medical staff and tying a significant portion of doctors' pay to meeting business quotas, says the foundation's senior counsel Ed Howard.
Kaiser spokeswoman Marcy Kates says the complaint is unfounded. "This lawsuit is based on a completely false premise. All medical-care decisions at Kaiser Permanente are made by our physicians," she says. "If you look at our name, Kaiser Permanente, and you know that our physician groups are the Permanente Medical groups, that ought to give a clue about how decisions are made in this organization."
Late last year, a lawsuit filed in Texas against NYLCare (now owned by Blue Bell, Pa.-based Aetna U.S. Healthcare) charged the insurer with a "pattern of deception," including using local hero Tom Landry in advertisements to lure seniors into the NYLCare Medicare HMO (see December 1998, page 3). Landry told seniors that "NYLCare 65 will give you as many hospital days as your doctor will authorize." The case, which is pending, charges that NYLCare actually had a policy to limit hospital stays.