RICO Lawyer & Attorney : Thomas Walker : Cosho Humphrey Law Firm : RICO Act, Federal and State Racketeering Litigation, Boise Idaho

The American Medical Association, Connecticut State Medical Society and several other state societies are suing Aetna (NYSE:AET) and CIGNA (NYSE:CI), claiming the companies shortchanged doctors by millions of dollars for out-of-network care. The groups filed lawsuits, proposed as class actions, in a New Jersey federal court this week seeking restitution for what they call a scheme by the insurers to maximize profits.

Aetna and some other insurers have already agreed to pay millions to settle New York Attorney General Andrew Cuomo's investigation into the same matter, but those amounts didn't include any restitution for physicians. The money will be used to create a new database to replace the problematic one run by Ingenix, a UnitedHealth Group (NYSE:UNH) unit.

The Ingenix system is accused of collecting and providing skewed data that insurers use to determine what they consider is "reasonable and customary" to pay physicians who don't participate in their networks. In out-of-network care, doctors can bill patients for the balance if insurance reimbursement falls short.

The lawsuits allege that Aetna and CIGNA violated the Racketeer Influenced and Corrupt Organizations Act, the Sherman Antitrust Act, and the Employee Retirement Insurance Security Act.

Plaintiffs in the suits include medical societies in New York, New Jersey, Texas and North Carolina.
 

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A New Jersey federal judge on Friday, September 28^th, threw out the remaining racketeering claims pending against several dozen insurers and brokers in a class action lawsuit stemming from industry wide investigations into bid-rigging and client-steering allegations.

The decision, which follows a recent ruling dismissing antitrust claims against the brokers and insurers, resolves the major claims in the consolidated litigation brought on behalf of commercial property/casualty insurance policyholders and employee benefit plan sponsors, who sued the firms following the investigations initiated by then-New York Attorney General Eliot Spitzer.

Plaintiffs alleged that the companies engaged in a conspiracy in which they allocated clients, fixed prices and restrained trade in violation of Racketeer Influenced and Corrupt Organizations Act and the Sherman Antitrust Act. In earlier rulings, Judge Brown and a previously assigned judge rejected antitrust and RICO allegations against the insurers and brokers. Judge Brown earlier this year gave plaintiffs a final chance to amend their filings and bolster their case with supplemental pleadings.

After ruling in late August that the consolidated suit lacked factual support for claims of a widespread antitrust conspiracy, U.S. District Judge Garrett E. Brown Jr. said Friday the suit also lacked factual evidence of a RICO enterprise.

“Plaintiffs’ allegations offer nothing more than a kaleidoscope of acts executed by a kaleidoscope of actors, and combine broker-defendants and insurer-defendants in such a fashion that the court is unable to discern any systemic permutation,” Judge Brown wrote in his 73-page decision. “While discussing dozens of transactions and hundreds of actors, plaintiffs fail to outline even a single set of actors that interacted with each other and executed their transactions systemically.”

The plaintiffs alleged the brokers and insurers participated in the operation or management of a RICO enterprise by, among other things, reaching agreements with each of the insurers regarding the amount of contingent commissions to be paid to the broker and the level of business to be steered to each insurer defendant and then coordinated the concealment of the scheme, according to court papers.

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