Connecticut attorney general sues HMOs

November 1, 2000

Pharmaceutical Representative

Connecticut Attorney General Richard Blumenthal announced that he has filed a class action lawsuit in the U.S. District Court in Connecticut against four of Connecticut's largest managed care companies: Anthem Blue Cross and Blue Shield of Connecticut (and its parent, Anthem Health Plans Inc.), CIGNA HealthCare of Connecticut (and its parent, CIGNA Health Plans Inc.), Oxford Health Plans of Connecticut Inc. (and its parent, Oxford Health Plans Inc.) and Physicians' Health Services of Connecticut (and its parent, Foundation Health Systems Inc.).

Connecticut Attorney General Richard Blumenthal announced that he has filed a class action lawsuit in the U.S. District Court in Connecticut against four of Connecticut's largest managed care companies: Anthem Blue Cross and Blue Shield of Connecticut (and its parent, Anthem Health Plans Inc.), CIGNA HealthCare of Connecticut (and its parent, CIGNA Health Plans Inc.), Oxford Health Plans of Connecticut Inc. (and its parent, Oxford Health Plans Inc.) and Physicians' Health Services of Connecticut (and its parent, Foundation Health Systems Inc.).

The lawsuit alleges widespread abuse in violation of the Employee Retirement Income Security Act of 1974, which requires health plans to act solely in the interest of enrollees.

"These managed care companies have a moral and legal obligation to be truthful to the public and to put the needs of their patients first," Blumenthal said. "They have failed. They have forced people to accept less effective care, simply so the company can increase its profits. They have failed to be honest and forthcoming with essential facts and information. They have used a variety of tactics: using arbitrary guidelines to deny coverage, denying needed prescription drugs, concealing information, complicating the appeals process and delaying and denying payment. These tactics deny the necessary coverage and medical care that they agreed to provide."

The lawsuit alleges that the companies:


•Â Used prescription drug formularies to obstruct patient access to medically necessary prescription drugs. If the drug is not available on the plan's formulary, the enrollee is given no notice of denial or his or her right to appeal, although such notice is required by ERISA.


•Â Failed to make timely payments to providers, thereby threatening enrollees with the loss of necessary care.


•Â Failed to respond to enrollees' written and telephone communications with timely, coherent and fair answers.


•Â Failed to disclose to enrollees essential information about the healthcare plans, when ERISA specifically requires that this information be disclosed.


•Â Used arbitrary coverage guidelines as the basis for coverage denials.

"HMO abuses adversely affect people's lives in a number of ways: aggravated pain and suffering, added out-of-pocket expenses and delayed recovery," Blumenthal stated. "These companies failed to put patients first, as the law requires."

According to Blumenthal, the lawsuit does not seek monetary damages. Rather, it seeks basic reforms in managed care practices that will compel health plans to comply with the ERISA requirement to act solely in the interest of enrollees.

HMO response

CIGNA HealthCare denied any wrongdoing and defended its business practices. "As a major Connecticut employer, we would have expected the attorney general to have extended to us the courtesy of reviewing our standards, practices and quality of care and customer service initiatives before instituting suit," read a statement released by CIGNA. "Had he done so, we are confident he would have found them to be among the best in the industry. Connecticut is a leader in healthcare regulation. The state has some of the finest patient protections in the country. The legislature and governor have taken steps on behalf of consumers with the creation of a state office of ombudsman to assist in resolving issues that health plan members might have. We fully support those initiatives."

Concluded the statement, "We will vigorously defend our company against the allegation made in the lawsuit." PR

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