HMO LIABILITY: Judge Upholds Texas’ Right-To-Sue Law
A federal judge Friday upheld Texas' "groundbreaking" law that allows consumers to sue their HMOs for denied health care. The Dallas Morning News reports that U.S. District Judge Vanessa Gilmore discarded Aetna Inc.'s claim that federal law -- the 1974 Employees Retirement Income Security Act -- preempts state law. However, Gilmore "ruled in favor of Aetna on several points," throwing out "much of the state's independent review process," a decision that "means members of employer-paid health plans will have to file lawsuits to obtain that treatment" (Ornstein, 9/19). In a 64-page opinion, Gilmore said the state law "addresses the quality of benefits actually provided," and that "ERISA simply says nothing about the quality of benefits received." But because ERISA already contains some directions on reviews for denied treatment, Gilmore ruled that the state law's edicts on third-party reviews are illegal (Maharaj, Los Angeles Times, 9/19). Thus, the Texas law allows consumers to sue their health plan if they believe the plan "failed to provide ordinary care," but Aetna attorneys noted the ruling "did not give patients the right to sue HMOs in cases where there is a dispute over whether a benefit is covered by their insurance policy" (Dallas Morning News, 9/19).
Win, Win Situation?
The New York Times reported that "[b]oth sides hailed [Friday's] decision as at least a partial victory." David Mattax, an assistant Texas attorney general, said, "This is a victory for patients and it upholds in the main the Texas statute" (Cropper, 9/19). State Attorney General Dan Morales (D) echoed that sentiment, saying, "It is only right that when an HMO denies or limits health care for a member resulting in continuation or exacerbation of medical problems, it is held accountable for that decision." Aetna also said it was pleased with the ruling. David Simon, the insurer's chief legal officer, said "we are very pleased that it appears to have properly held that significant portions of ... (the state law) are pre-empted by federal law" (Dallas Morning News, 9/19). Consumer groups also lauded Gilmore's decision. "This ruling is a tremendous victory for patients who deserve to be able to take HMOs to state court and receive damages," said Consumers for Quality Care's Jamie Court (CQC release, 9/18). The Wall Street Journal reports that physician groups also "applauded" the decision. Connie Barron of the Texas Medical Association called "the ruling a defeat for the [insurance] industry," saying the decision "says that when you are making medical treatment decisions that affect the quality of care and that result in injury, you're accountable for that" (McGinley, 9/21).
Or Lose, Lose?
But others were not so pleased with Gilmore's ruling. "Consumers are the losers because they will be denied access to the independent review process which has been working very well in Texas," said Texas Insurance Commissioner Elton Bomer. "The court upheld the consumers' right to sue an HMO for negligence, but unfortunately this remedy is only available after harm -- often serious harm -- has already occurred," he said. Texas Association of Health Plans attorney Jeff Kloster echoed Bomer's opinion that right-to-sue without prior appeals process is "doubly harmful," saying, "This is the worst-case scenario that we could envision."
A Moot Point?
The Dallas Morning News reports that in Gilmore's "most direct commentary," she "encouraged Congress to refine ERISA." She wrote, "If Congress wants the American citizens to have access to adequate health care, then Congress must accept its responsibility to define the scope of ERISA pre-emption and to enact legislation that will ensure every patient has access to that care" (9/19). The Los Angeles Times reports that the Texas case was being "closely followed across the nation," and consumer advocates said the ruling "could bolster efforts" to pass similar legislation in "more than a dozen other states" (9/19). But because of Republican opposition at the federal level, the Wall Street Journal reports that "few people think federal managed care legislation will be enacted this year," despite broad support for such reforms among consumers and physicians (9/21).