The wave of court actions affecting managed care continued last week as the U.S. Supreme Court ordered a Pennsylvania court to reconsider its ruling allowing a man who claims negligence rendered him quadriplegic to sue his HMO in state court.
HMOs maintain that a federal pension law that governs employee retirement and healthcare plans bars such state lawsuits. But in 1998 the Pennsylvania Supreme Court concluded otherwise, ruling that a negligence suit against an Aetna subsidiary could go forward because "Congress did not intend to pre-empt state laws which govern the provision of safe medical care."
Without comment, the U.S. Supreme Court ordered the Pennsylvania court to rethink the case in light of another high court ruling made earlier this month. That June 12 decision held that because "treatment rationing" is the very essence of HMOs, health plans cannot be sued under a federal law for offering doctors financial incentives to hold down treatment costs (June 19, p. 3).
"The Supreme Court didn't give much in the way of explanation for its latest decision," said Susan Pisano, spokeswoman for the American Association of Health Plans. "But we believe the Court was sending a definite message, which echoes its previous one, that the courts aren't the best place to solve healthcare disputes."
The Pennsylvania case got its start in 1991, after Basile Pappas went to the Haverford (Pa.) Community Hospital emergency room with a spinal abscess. Although doctors agreed Pappas' condition was a neurological emergency, the Aetna U.S. Healthcare Pennsylvania unit refused to authorize his transfer to a non-network hospital for specialized care.
Pappas, who was left paralyzed from the neck down, sued his primary-care doctor and the Haverford hospital for negligence in delaying his treatment. Haverford filed a third-party complaint against the HMO for its refusal to transfer Pappas to the hospital his doctors had selected.
U.S. Healthcare argued the claims against it were precluded by the federal Employee Retirement Income Security Act (ERISA), which governs workers' medical and pension benefits. A trial court agreed with the HMO and dismissed Haverford's suit.
On appeal, the Pennsylvania Supreme Court found otherwise. It said state-law negligence claims didn't "relate to" an ERISA plan and so weren't pre-empted by the federal statute.
The latest rulings do not affect patients' right to file claims in state courts alleging that an individual doctor committed medical malpractice. Neither do they prevent Congress or the states from voting to give patients new rights to sue their HMOs for failing to authorize proper medical care.
This issue has become a key sticking point in House-Senate deliberations over a new patients' rights bill, with Republicans seeking to bar lawsuits against HMOs and Democrats pushing for the creation of that legal right.
According to Ronald Pollack, director of the consumer advocacy group Families USA, the Supreme Court's latest decision "is a very timely reminder that we need federal patients' rights legislation. The ruling underscores the fact that consumers can do little to hold their health plans accountable for decisions that wrongly deny or delay needed care."
About 123 million Americans receive healthcare through ERISA-regulated employee benefit plans.