AETNA: To Pay $116M for ‘Malice, Oppression, and Fraud’
In a move likely to fuel the debate over whether patients should be allowed to sue their HMOs, a jury today awarded $116 million in punitive damages to a woman whose husband died of cancer after Aetna U.S. Health Care of California refused to pay for a bone marrow transplant. The verdict, the largest ever against an HMO, follows the San Bernardino, CA, jury's decision last week to award Teresa Goodrich $4.5 million in damages for medical expenses and loss of companionship. Today's award, for "malice, oppression and fraud," brings the total to more than $120 million (Marquis, Los Angeles Times, 1/21). David Simon, chief legal officer for Aetna, said the insurer will appeal the decision. "This verdict clearly seems to have been driven by emotion and not by any logic, and by sympathy and not by facts," he said (Jeffrey/Winslow, Wall Street Journal, 1/21). In addition to other "facts," Simon said the judge refused to allow Aetna to present evidence showing that Goodrich's insurance policy explicitly excluded the bone barrow transplant (Johnston, New York Times, 1/21).
Most private employee health plans are protected from such suits under the Employee Retirement Income Security Act, but Goodrich was able to sue because her husband David had been a government employee. The Los Angeles Times reports the case "could fuel the already heated political debate over whether far more patients ought to be able to sue HMOs" (1/21). Jamie Court, director of Consumers for Quality Care, said, "Court cases like this are rare because most Americans, 125 million of them, cannot under federal law sue their HMO for bad faith or denying treatment. The jury was telling Congress to pay attention to denial of rights that kill patients." Simon contends that the award "was six times the California HMO's net worth" (New York Times, 1/21). Larry Levitt, a health analyst with the Kaiser Family Foundation, said, "This shows that the issue that is driving the consumer debate is the fear that plans are looking over the shoulder of doctors and are denying what a doctor perceives to be medically necessary" (Wall Street Journal, 1/21).