A decision last month by New York's highest court may give new impetus to deceptive-practices suits against providers and insurers.
In May, New York's Court of Appeals ruled that a Westchester County couple could sue a fertility clinic and the doctor and hospital that provided fertility treatments for deceptive practices and false advertising. Recent suits by consumers have alleged false advertising and marketing (see May, page 18; April, page 10).
In 1987, Jayne and Kenneth Karlin began fertility treatments with IVF America and John Stangel, M.D., at United Hospital Medical Center in Port Chester, N.Y. The Karlins underwent seven treatments in 21/2 years without success.
In 1990, the Federal Trade Commission charged IVF, a Purchase, N.Y.-based in-vitro fertilization clinic now known as IntegraMed America, with deceptively advertising its program and exaggerating its success rates in advertising materials. IVF agreed to cease and desist. But in 1993, the New York City Department of Consumer Affairs charged the clinic with violating the city's consumer protection law.
The next year, the Karlins sued IVF for engaging in fraudulent and misleading conduct by misrepresenting the success rates and health risks of its treatments.
Overturning lower-court decisions, the appeals court cleared the way for the Karlins' claims of unfair and deceptive trade practices to proceed this summer in Westchester County Supreme Court. "A blanket exemption for providers of medical services and products is contrary to the plain language of the statutes," the court said.
Jane Azia, deputy chief of the consumer bureau in the New York attorney general's office, says healthcare providers, like other businesses, must be able to substantiate their claims. "The more medical-service providers market themselves as businesses . . . the more they should be subject to traditional consumer fraud protections," she says.