PacifiCare Is Latest HMO Targeted by Class-Action Suit

PacifiCare Health Systems Inc., the No. 1 operator of Medicare health-maintenance organizations, is being sued by its members on claims of false advertising and unfair business practices.

Santa Ana-based PacifiCare is accused of violating the California Consumer Legal Remedies Act by failing to disclose company policies that seek to keep treatment costs down and encourage physicians to avoid referring members to specialists, according to a suit filed Tuesday in San Francisco County Superior Court.

The suit seeks class-action status on behalf of 1.6 million California-based members over the last four years, and marks the latest legal assault on HMOs. Aetna Inc., the nation’s largest health insurer, and Humana Inc. are targets of similar suits.

“We’re trying to bring full disclosure to HMOs’ practices, which interfere with the physician-patient relationship and prevent the honest delivery of medical services,” said Bruce Wecker, one of the attorneys suing PacifiCare.

The suit alleges PacifiCare’s advertising was deceptive in declaring that its primary commitment is to maintain and improve the quality of health care for its members. It seeks a court order preventing PacifiCare from any allegedly unfair business practices, Wecker said.

PacifiCare Chief Executive Alan Hoops said the company hasn’t been served with the suit and hasn’t had a chance to review the allegations.

“However, this is one of many lawsuits filed recently against HMOs, and it’s unfortunate that trial lawyers are taking steps to drive up health-care costs for consumers by forcing unwarranted, costly and protracted litigation,” Hoops said in a statement.

PacifiCare’s stock rose $3.13 a share to $43.75 in Nasdaq trading.