HMO LIABILITY: Humana Hit With $13 Million Judgment
In a decision that sends "a stunning message to the managed health-care industry," a jury in Louisville, KY, yesterday "awarded more than $13.1 million" to a woman "who claimed Humana Health Plan acted in bad faith when it refused to pay for a hysterectomy her doctor said was necessary to cure her cervical cancer." The plaintiff, Karen Johnson, filed suit after Humana rejected coverage for a hysterectomy in favor of "a less invasive procedure, called a conization." According to the Louisville Courier-Journal, Johnson's attorneys tried to put the managed care industry on trial, "attacking what they called Humana's 'system of denial.'" But Humana attorneys centered their defense on Johnson's medical prognosis, noting that three board-certified gynecologists testified "that it was not medically necessary for Johnson to have a hysterectomy and that she should have the less risky conization." A Humana attorney noted that the health plan paid for the conization prior to Johnson's hysterectomy and that a pathology report "indicated that all of the cancer was removed in the conization." But plaintiffs' attorney Mark Gray argued that "it was unreasonable that the doctors who reviewed her claim had never even seen her contract with Humana and didn't know how 'medically necessary' was defined in it." He also said "it was unreasonable for Humana to pay its employees bonuses for keeping the number of hospital admissions down and the number of hospital stays low."
The jury voted 11-1 to award $13 million in punitive damages to Johnson, as well as $100,000 "for pain and suffering." Johnson's attorney "had asked the jury to award ... between $12 million and $25 million in punitive damages," an amount "he estimated ... was how much Humana saved by denying hysterectomies over the past three years." Gray said, "This case isn't about medicine. It's about mathematics. It's about money, the money Humana was going to make -- did make -- by denying medically necessary treatment." A Humana spokesperson said the health plan will appeal the verdict.
A Case With Repercussions
The Courier-Journal reports Johnson suit "has been closely watched nationally because it might offer a glimpse of what it would be like if all patients could sue." American Association of Health Plans general counsel Lou Saccoccio "said the verdict showed what might happen if more people are allowed to sue health plans" under patients' rights legislation backed by President Clinton. Saccoccio also said that "he knew of only one other verdict as large ever returned against" an HMO (Wessel, 10/21).