In a precedent setting condition, the U.S. Supreme Court ruled managed-care companies cannot be sued for damages in state court over their failure to pay for medical care deemed necessary by a doctor. In a unanimous decision, the high court dismissed negligence lawsuits filed under Texas' 1997 patient-protection law by enrollees who claimed their HMOs wrongly denied them coverage, leading to additional medical problems. The high court ruled, in an opinion by Justice Clarence Thomas, state lawsuits are "completely pre-empted" by the federal law known as Erisa, Employee Retirement Income Security Act of 1974, which limits against employer-sponsored health plans to federal court, where plaintiffs can recover only the value of the benefit that was denied. Justice Thomas said, "Any state law that duplicates, supplements or supplants the remedy available under the federal law conflicts with the clear Congressional intent to make the Erisa remedy exclusive."
This ruling pertains to the legal rights of more than 130 million Americans covered by employer-sponsored health plans, weakens patients-protection laws in Texas and nine other states (Arizona, California, Georgia, Maine, N.J., North Carolina, Oklahoma, Washington and West Virginia) that have granted patients the right to sue their HMOs for malpractice. This Supreme Court case consolidated separate lawsuits filed against Aetna and Cigna Corp. In Aetna Health v. Davila, the plaintiff (Davila) suffered from bleeding ulcers after Aetna denied him the brand-name drug, Vioxx, prescribed by his doctor, in favor of a cheaper generic alternative. The other lawsuit, Cigna HealthCare of Texas v. Calad, the plaintiff (Calad) suffered complications after Cigna discharged her from the hospital within one day of having undergone a complicated hysterectomy.
Justice Thomas concluded, "…In any event the plaintiffs' injuries could not fairly be attributed to their managed-care companies if those companies 'correctly concluded that, under the terms of the relevant plan, a particular treatment was not covered."
Congress now will have to decide if patients should be afforded rights of action against HMOs similar to those sought by Texas legislatures who passed the 1997 Texas patient-protection law. Recently these attempts at federal legislation were held up by partisan differences and many feel time is running out for any legislative action this year yet. Bush, in the 2000 presidential debate with then-VP Al Gore, stated he helped form bi-partisan support for passage of the Texas law, but administration attorneys opposed the Texas plaintiff's case before the Supreme Court earlier this year. Democratic presidential candidate Sen. John Kerry (D-Mass.), is calling for a federal patient bill of rights and, according to The New York Times, plans to make the so-called bill of rights to regulate managed health care an increasing focus of his healthcare platform.