Justices appear split on HMO issue
Patients want state court, larger awards
From Bill Mears
CNN
WASHINGTON (CNN) -- A patient whose hospital stay was cut short and a man forced to take a cheaper prescription drug want their day in court to prove their malpractice lawsuits. The question Tuesday before the Supreme Court was: Just which court should decide the matter?
After oral arguments, the justices appeared split on the issue.
At issue is a states' rights dispute over whether federal courts are the proper forum for hearing certain malpractice and negligence claims against health maintenance organizations, or HMOs. Different states have various laws that can either make it easier or more difficult to pursue such lawsuits in federal court. State courts traditionally have allowed greater damage awards by juries against businesses, industry and the government.
A ruling by the court could help settle a range of disputes that arise when managed care companies deny patients benefits to pay for recommended treatment.
The two cases were brought against large HMOs in Texas. Juan Davila had been taking the painkiller Vioxx for his arthritis, on his doctor's advice. He claims Aetna Health forced him to take a cheaper drug that caused dangerous side effects such as internal bleeding. He initially brought his lawsuit in state court, citing Texas patient protection legislation.
And Ruby Calad sued Cigna Health, after claiming the company would pay for only one day of post-op recovery after hysterectomy surgery. Her doctor had recommended a longer stay, but Calad said she could not afford it. She suffered medical complications days later and was back in the hospital.
"I couldn't walk, they had to lift me from the bed to the wheelchair," Calad told CNN. "This is wrong. This is unethical. This is not right. They are treating you like a piece of meat."
The insurance industry claims the 1974 Employee Retirement Income Security Act (ERISA) gives federal courts power over a state's patient protection laws when dealing with disputes over medical benefits. Federal courts have traditionally been less willing to allow large punitive damages against insurance companies in malpractice claims.
But federal laws, state laws and the courts have disagreed over the years when disputes arise over treatment and coverage, and the Supreme Court was asked to help erase much of the ambiguity.
In arguments Tuesday, the justices wrestled with conflicting definitions of care and coverage.
"To make a coverage decision, doesn't one have to make a medical judgment?" asked Justice John Paul Stevens.
Justice Sandra Day O'Connor seemed to agree. "If you're [insurance companies] telling doctors what's medically necessary, then aren't you defining necessities of medical care?"
George Young, attorney for Calad and Davila, argued, "Texas filled a vacuum to offer a professional, medical standard of care" that the federal ERISA law did not detail. Without that state oversight, said Young, HMOs would be free "to decide whatever care they think is appropriate."
That did not satisfy many of the justices.
"All we're talking about is money," said Justice Antonin Scalia. "All the HMO said was, 'Under the plan ... we don't have to pay for Vioxx, and if you want Vioxx buy it yourself.' All this company was doing was looking at the contract, and saying, 'Do we owe any money?'"
Miguel Estrada, attorney for Aetna and Cigna, said managed care companies provide "limited liability under predictable standards," which he said controlled costs for all patients. Estrada argued laws in Texas and nine other states that regulate HMOs create financial uncertainty, and send conflicting signals from federal oversight.
More than 175 million Americans, including retirees, participate in work-sponsored health insurance plans, mostly in managed care plans like HMOs. Ten states have passed laws allowing patients to sue HMOs. But those laws only apply to patients who buy their own insurance or work in a state government job.
Insurers say a ruling against them would only drive up costs.
"If there's a threat of going to state court every time there's a question about the scope of coverage for an individual, then health care could very well become unaffordable for many employers and many more consumers," said Susan Pisano of America's Health Insurance Plans.
A ruling in the case is expected by late June.
The cases are Cigna Healthcare of Texas v. Calad (03-0083) and Aetna Health Inc. v. Davila (02-1845).
