A national consumer rights group is making a habit out of slapping health plans with unusual lawsuits.
Last month, the Santa Monica, Calif.-based Foundation for Taxpayer and Consumer Rights filed a class-action racketeering lawsuit against Blue Bell, Pa.-based Aetna U.S. Healthcare, charging widespread fraud in the HMO's advertising, marketing and membership materials. It's believed to be the first federal lawsuit filed against an HMO under the Racketeer Influenced and Corrupt Organizations Act.
In March, the same consumer group filed a class-action suit against Oakland, Calif.-based Kaiser Permanente, charging false advertising (see April, page 10).
The lawsuit against Aetna was filed in U.S. District Court in Philadelphia on behalf of millions of HMO customers. The suit alleges that since Aetna and U.S. Healthcare merged in 1996, the insurer has engaged in a widespread campaign of false advertising and marketing, impeded physicians' ability to provide high-quality healthcare and misled enrollees about the quality of its medical coverage. The suit seeks damages (the amount will be determined during discovery) and injunctions prohibiting Aetna from falsely marketing and advertising its policies, says the foundation's legal counsel Ed Howard. Under racketeering laws, damages may be tripled.
"Aetna should no longer be able to advertise and represent that they are primarily committed to quality when in fact their systems are designed to reap profits and undermine quality medical care," says Jamie Court, the foundation's advocacy director. "What is at stake in this case is whether HMOs like Aetna will be able to advertise and solicit new members by defining quality based on the least costly path."
Aetna issued a statement calling the lawsuit "frivolous" and declaring it plans to defend itself vigorously. The insurer has until midmonth to respond to the lawsuit and may seek a motion for dismissal, a spokeswoman says.