Bob,
We have a choice of proceeding simply as concerned individuals.
As such we would avoid the bureaucratic paperwork of a legal organization,
but we would incur all the risks of joint and several liability.
Notwithstanding the paperwork it entails, I much favor forming a
non-profit organization, analogous for example to the Physicians
for Social Responsibility, some of the environmental groups such
as Greenpeace or the Sierra Club, or some of the consumer activist
groups. The efficient way to proceed is to go to the governmental
agency which archives such articles of organization in whichever
state one chooses to incorporate, get copies of the articles of
incorporation and by-laws of ones models, and modify these to suit
ones needs. The signatures of three individuals, one of whom must
be a resident of the state in which one incorporates, are required.
Filing fees are nominal. The incorporators select the initial members
of the corporation, presumably themselves. The bylaws state the
criteria for the admission of other members. About ten years ago,
I successfully organized such a non-profit organization (Cambridge
Glaucoma Foundation, Inc) and obtained tax exemption for it from
the IRS. When I discovered that fund-raising was repugnant to me,
I let it die.

For our purposes, a non-profit organization would have the
additional advantage of being eligible for funding by other non-profit
Foundations, as well as by the Health Care Financing Administration
itself. The officers and members of a non-profit organization,
barring gross indiscretion, should be practically immune from civil liability.
I would recommend including in the by-laws, provisions
permitting the annual meeting to be conducted by tele-conferencing,
and provisions also permitting officers of the corporation
who are not attorneys to represent it in court. Both of these
provisions are untested. If they were sustained by the courts,
much would be gained. If they were stricken, little would be lost.

I myself favor as broadly based a membership as feasible,
not limited to physicians, or for that matter, to health-care
professionals.  I would be willing to participate in
and contribute my own efforts  (but only a limited amount of money)
to such an organization so long as it
remained focussed upon protecting the physician's freedom,
unfettered by administrative constraints,
not to exploit, but to care for his/her patient
with the same devotion and singlemindedness with which
the physician would care for a member of his/her family.
I know that some subscribers to this List do not value
that freedom and believe that it must be subordinated
to economic considerations. We particularly need their help
to work out practical compromises. It is very important
that we be practical and constructive and that our efforts
should help to move our country toward a resolution of
the present health-care crisis.

An initial project of our proposed organization might be to
determine whether any of the practices that offend us are
actionable under the federal False Claims Acts, which have been
commonly used for blowing whistles on defense contractors.
It being a holiday in Massachusetts, the libraries are closed,
and I do not have a copy of the U.S. Code at hand. However
I know that the False Claims Act permits an individual or a
corporation to file with the United States Attorney's office
a complaint alleging that the defendant had made false claims
to the United States government for the purpose of obtaining
federal funds. Arguably false or misleading advertising that
induced patients to join a Health Plan would be subject to
the strictures of that act. Certainly failure to comply with
the terms of the regulations under which such funds were paid
would be actionable.  The United States attorney (i.e. Janet Reno)
then has ninety days within which to adopt such a claim and prosecute
it on behalf of the federal government. The penalty is three times
the sum fraudulently obtained. If the government declines to prosecute
the charge, the complaining party may prosecute the claim on its own,
but is liable for the defendant's legal expenses, if the defendant
prevails. If the government wins the case, the original complainant
receives ten percent of the penalty recovered. If the complainant
wins the case on behalf of the government, the complainant receives,
I believe, up to twenty five percent of the sums recovered.
It would be eminently proper, in my opinion, for a corporation
such as the one we contemplate, to use any such funds to defray
its operating expenses; although obviously, it is silly for us
to count our chickens before they are hatched.