RIGHT-TO-SUE: Two Court Decisions, Two Different Results
The Wall Street Journal reports that two courts last week "sent sharply differing messages on efforts to expand consumers' ability to sue their health maintenance organizations." In a decision Thursday, the Illinois Supreme Court ruled that "patients can sue their HMOs over alleged malpractice." But in another decision also rendered Thursday, a federal district court in Philadelphia dismissed a national class-action lawsuit in which consumers alleged that Aetna U.S. Healthcare had promised in advertisements to "deliver high-quality medical care but instead encouraged widespread cost-cutting that actually hurt care." In the Philadelphia decision, Judge John Fullam said that the consumers "lacked the standing to bring the suit because they hadn't claimed actual harm due to a denial of benefits or poor treatment." Fullam also said that the case had several "fatal defects," including the allegation of false advertising. He said, "Such general assertions as to quality are puffery and do not constitute a fraudulent inducement to membership in the HMO plans" (McGinley, Wall Street Journal, 10/4).
Coverage Rules Influence Doctor Decisions
The Illinois Supreme Court ruling allows patients to sue HMOs for malpractice under the theory that "decisions on what treatments the companies will cover amount to medical care." The decision stems from the case of a Chicago woman, whose HMO denied payment for an expensive diagnostic test for nearly a year, until it relented and the test found that the woman had cancer. The woman died last fall and her husband is continuing the case. In the decision, the court said that HMOs "act as health care providers and not just insurers since their rules on coverage affect doctors' decisions." The HMO is a for-profit venture, and Chief Justice Michael Bilandic said, "HMO accountability is essential." HMOs have argued that allowing patients to sue will drive up already escalating health care costs. Christopher Hamrick, spokesperson for the Illinois association of HMOs, said, "We're very disappointed with the ruling. It's hard to gauge its impact right now, but we're concerned that it could result in higher costs." Meanwhile, patients' rights advocates applauded the Illinois decision. John Cameron, executive director of Citizen Action, said, "HMOs are going to be much more cautious about denying needed medical care. This ruling is part of an increasing trend that recognizes that HMOs are practicing medicine, even though they don't have a license on the wall" (Johnson, New York Times, 10/2).
The mixed messages from Illinois and Philadelphia come amidst much uproar over the right to sue: several high-profile plaintiffs' attorneys are preparing to file "a new wave of class-action lawsuits" against HMOs, the Supreme Court has signaled it will hear a case on the legality of common HMO cost-containment practices, and the House of Representatives is preparing this week to take up patients' right to sue.