5 Major HMOs Targeted in Class-Action Suits
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The Los Angeles Times reported today that five of the nation's largest HMOs face new lawsuits accusing them of failing to provide promised health care to 32 million customers, according to published reports.
HMOs named in the suits are Pacificare Health Systems Inc., Foundation Health Systems Inc., Cigna Healthcare, Prudential Health Care and Humana Inc.
The suits seek class-action status on behalf of 32 million people whose health care is provided by the companies.
The suits were filed by a group of lawyers led by Richard Scruggs, who led lawsuits filed by states against the tobacco industry that resulted in billions in settlements.
"We're acting today to fix the broken promises the HMO industry has made to the people who entrust their very lives to these companies," Scruggs said.
The lawsuits allege HMOs offer bonuses to physicians who restrict patients' access to expensive procedures, treatments and tests.
Health plan stock prices have plunged recently as state and federal lawmakers increased regulation of HMOs and public opinion toward the industry soured. There are now at least nine recent class-action suits alleging violations of federal law by managed health plans.
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