California heats up: will a jury decide the future of medicine? - Managed Care on Trial

Physician Executive, Sept-Oct, 2000 by Earl R. Washburn

What is being sought?

The CMA lawsuit asks for injunctive relief for the physicians of California from several alleged activities:

1. It asks the court to make a declaration against for-profit managed care organizations' "right to usurp the Plaintiffs members' ability and duty to make decisions regarding patient needs, based on professional medical judgment and the professional standard of care, and to prevent Plaintiffs members from providing appropriate medical care." (14)

2. It seeks an injunction enjoining the defendants from "pursuing fraudulent and extortionate polices and practices" including "prohibiting the payment of reimbursement which is not adequate to cover the costs of delivering health care services Defendants have promised Defendants' members." (14)

3. It seeks "An injunction enjoining the Defendants from utilizing or enforcing any current or proposed provider contracts or policies which compromise patient care or are otherwise unfair or unreasonable." (14) The suit lists ten categories of contracts and polices to be enjoined, including:

* The definition of medical necessity

* Utilization review criteria and procedures, including prior authorization or physician profiling

* Clinical practice guidelines and/or medical management policies

* Drug formularies

* Patient referral standards, including those applicable to out-of-network referrals

* Quality assurance programs and audits

If the court enjoins against even several of these policies and procedures, managed care as we know it is dead. The suit does not seek any monetary damages except for plaintiffs legal costs to be paid by the defendants.

Who is not named in this suit?

Two groups are conspicuously absent in this action: (1) physician groups and IPAs; and (2) not-for-profit managed care organiztions. Part of CMA's reason for joining this lawsuit relates to those who are unnamed. An official CMA Q&A release addresses the issue of medical groups and IPAs: "The complaint directly states that these entities (medical groups and IPAs) will not be defendants in this lawsuit as these groups, as well as solo practice physicians and physicians in small groups, have all been subject to the unfair practices of the health plans." "CMA's involvement seeks to ensure that California medicine, including groups and IPAs, are at the table with us. Without that involvement, we are unable to influence both the course of the litigation and the potential future of any court-directed reshaping of California's delegated health care delivery model." (15)

This is a tacit admission of one reason why CMA had to become the lead plaintiff in this suit--being outside means having no say in the direction that the litigation takes. Later in the same Q&A document CMA notes, "The attorneys bringing the lawsuit were clear that with or without CMA's participation, they would be filing a class action against these specific, for-profit plans. Under the circumstances, given the scope and magnitude of the litigation, CMA believes that its presence in the case is in the best interest of California physicians, physician groups, and their patients." (15)