Managed care scored another court victory in August when an appeals court dismissed a class-action lawsuit against Aetna that accused the insurer of using misleading advertising and violating racketeering laws.
In Maio vs. Aetna, the U.S. Court of Appeals for the 3rd Circuit ruled the plaintiffs, a couple from Pennsylvania, failed to prove they were injured because of Aetna's advertising and recruitment procedures. The Maios sued on behalf of themselves and current and former Aetna enrollees, accusing the insurer of violating the Racketeer Influenced and Corrupt Organizations Act (RICO).
"There is no factual basis for appellants' . . . allegation that they have been injured in their 'property' because the health insurance they actually received was inferior and therefore 'worth less' than what they paid for it," the court wrote.
The ruling, issued Aug. 11, upheld a lower court's dismissal of the suit. The suit was filed in April 1999.
Eugene Spector, an attorney for the Maios, said they were disappointed with the ruling but hadn't decided whether to appeal.
Aetna's attorney didn't return phone calls seeking comment.
There are more than a dozen pending class-action lawsuits against managed care companies around the nation, accusing them of everything from mail fraud to racketeering to blackmail. Aetna alone faces eight lawsuits.
The Maio ruling was the third victory for insurers since January, when a 5th Circuit court dismissed Ehlmann vs. Kaiser, ruling that health plans don't have to tell subscribers about financial incentives paid to doctors (see February, page 14). The Supreme Court handed enrollees another defeat in June when it ruled in Hedrich vs. Pegram that HMOs can't be held liable for financially rewarding physicians for keeping costs down (see July, page 3).
The ruling didn't surprise some in the healthcare industry. Officials at the Health Insurance Association of America expect the same result in other cases with a RICO component, says Melissa Dodson, assistant director for policy and counsel for the policy development at HIAA.
"The court clearly has sent the message that allegations of hypothetical injury are an insufficient basis," Dodson says. "Without actual injury, there is no cause of action."
The Maios sued the nation's largest insurer for allegedly making false promises and for not telling patients that network physicians were allegedly driven by fiscal and administrative factors as well as patients' health.
The 3rd Circuit judges noted that the plaintiffs' position had been "significantly undermined by the U.S. Supreme Court's recent decision" and that allowing the RICO claims would "be expanding the concept of RICO injury beyond the boundaries of reason."
The ruling mirrored several of the Supreme Court's points in the Pegram case.
"In view of the Supreme Court's reluctance in Pegram to devise a uniform standard by which federal courts could distinguish one HMO scheme from another . . . we must decline . . . to pass judgment on the social utility of Aetna's particular HMO structure," the court wrote.