The nation's largest health maintenance organizations endured a volatile trading session Tuesday after a federal judge in Miami lifted a stay on discovery in a class-action lawsuit.

On Monday, Judge Federico Moreno filed an order authorizing discovery, effective Sept. 30, 2002, in a suit that alleges health insurers used hidden financial incentives for doctors to deny treatment and cut costs. Analysts expect the discovery process to determine the merits of the class-action lawsuit.

Among the defendants in the case are

Aetna

(AET)

, which said on Tuesday that it "believes the cases lack merit and will continue to vigorously oppose them,"

Humana

(HUM) - Get Report

, and

United Healthcare

(UNH) - Get Report

. Each lost about 2% on Tuesday, but finished above their worst levels of the day.

Daren Marhula, an analyst at U.S. Bancorp Piper Jaffray, voiced optimism about discovery: "It allows the plaintiffs go in and look for a smoking gun," he said. "Chances are they won't find one."

Still, other analysts stress the seriousness of the class action. "For anyone to believe this major lawsuit will just go away is unrealistic," said Sheryl Skolnick, an analyst at Fulcrum Global Partners. "Given the personal and political nature of the issue, my expectation is it will be around for a long time."

As long as the case is on the books, both analysts expect continued volatility in managed care stocks. "There are going to be more days like Tuesday," said Skolnick. "These stocks aren't for the faint of heart."