A Federal appeals court ruling in New York expands patients' rights by allowing
patients to sue health insurance companies refusing to authorize medically necessary care
- creating a situation where the managed care industry may be held accountable if patients
were harmed by delays and denials of approval for care. The ruling, issued on Feb. 11 by a
three-judge panel of the United States Court of Appeals for the Second Circuit, stated
that Vytra Healthcare, a health plan based in New York, was not in a position to invoke
the federal Employee Retirement Income Security Act, known as ERISA, to prevent the widow
of a patient from suing the insurer - and accusing Vytra of medical malpractice. Vytra had
rejected the doctor's order for cancer treatment stating that the cancer treatment was
experimental and not covered under the contract. In the past, courts have held that
lawsuits that challenge a health plan's decisions have to be brought in federal court
under ERISA law - however, ERISA limits a patient's right to sue for this type of claim.
This case opens the door to hold these companies legally responsible for their
decision-making - when they deny care of a patient that a physician believes is medically
necessary - they could be held accountable for that action.