Supreme Court in March To Hear Case Related To Texas Law That Allows HMO Lawsuits in State Court
The Supreme Court on March 23 will hear oral arguments in a case concerning a Texas law that allows patients to sue HMOs in state court if they sustain injuries as a result of denied coverage, the Houston Chronicle reports. In the case, two Texas residents separately filed suit in state court against their health plans, Cigna Healthcare and Aetna Health, alleging that the companies made coverage decisions that adversely affected their health (Ross Hughes, Houston Chronicle, 1/27). In the Aetna case, Juan Davila received a prescription for Vioxx from his physician, but the rules of Aetna Health, a division of Aetna that operated his HMO, required Davila to take two less-expensive medications first. Davila had an adverse reaction to one of the medications that required him to receive care in the emergency room for bleeding ulcers. In the Cigna case, Ruby Calad underwent a hysterectomy, and although Cigna HealthCare of Texas, a division of Cigna that operated her HMO, specified coverage for only a one-day hospital stay, her surgeon recommended a longer stay. A hospital-discharge nurse employed by Cigna did not approve the longer hospital stay, and Calad was readmitted to the hospital several days after her discharge with complications from the hysterectomy. Both Davila and Calad filed suit in state court under state HMO laws.
The case will determine whether the administrative decisions of HMOs are protected from state lawsuits under the 1974 Employee Retirement Income Security Act. In previous legal proceedings, the health insurers argued that ERISA covered the cases and had them transferred to Federal District Court in Dallas, which ruled in favor of the companies. However, the 5th Circuit Court of Appeals in New Orleans ruled in 2002 that Davila and Calad could file suit in state court because "decisions on whether to pay for a particular treatment are decisions about both insurance," which is regulated under ERISA, and medical care, which is regulated under state laws (California Healthline, 11/4/03). In a friend of the court brief, Texas Attorney General Greg Abbott (R) argued that the state law was intended to protect patients from "negligent and wrongful conduct by HMOs." He added that the Supreme Court should "strike down these blatant attempts to dodge accountability under this state law." Susan Pisano, a spokesperson for the American Association of Health Plans-Health Insurance Association of America, said, "What we have said is that this case offers an opportunity for the court to clarify that companies make coverage determinations as part of their contract with employers" (Houston Chronicle, 1/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.