While the major behavioral carveout firms are fighting a legal battle in a New York court, the general managed care industry, including the parent organizations of some of these carveouts, is facing the prospect of waging war on a much wider front and with the potential for crippling monetary damages if they lose.

Some of the same attorneys who spent the last few years challenging and winning huge awards from the tobacco industry have shifted their attention to the legality of practices by the managed care industry, including HMOs.

This new wave of class-action lawsuits is designed to pressure the companies into rethinking the way they deal with patients and physicians. Plaintiffs attorneys have yet not revealed the precise grounds on which they will sue or the companies they intend to target.

Among the attorneys leading the charge against the managed care industry are David Boies, a lead attorney in the federal government’s antitrust suit against Microsoft, and Richard Scruggs, whose Mississippi law firm was a key player in the tidal wave of state and federal suits that shook the tobacco industry.

A statement issued by one of Scruggs’s associates, Hiram Eastland, and cited in the September 30 Wall Street Journal, noted that the goal of the new legal strategy is not to destroy the managed care industry, but to undertake a "concentrated effort to more comprehensively utilize the legal system to address core problems and legal violations associated with HMO abuses of patients’ and physicians’ rights."

The attorneys face the formidable challenge of developing a legal strategy that detours around the federal ERISA statute, which protects most insurance plans from being sued.

The managed care industry denies that it engages in illegal or unfair practices and has responded by vowing to mount an all-out defense. Stated Chip Kahn, president of the Health Insurance Association of America, which represents the nation’s large health insurance companies, "The entrepreneurial trial attorneys are barking up the wrong tree. They are going to hurt the consumer, not help him, by crippling health plans’ efforts to improve quality of care and keep insurance affordable."