In a precedent-setting decision, the U.S. Supreme Court ruled that managed-care companies cannot be sued for damages in state courts over their failure to pay for medical care recommended by a doctor. In a unanimous decision, the high court dismissed negligence lawsuits filed under Texas' 1997 patient-protection law by members who claimed their HMOs wrongly denied them coverage, leading to additional medical problems. The justices ruled that such state lawsuits are "completely pre-empted" by the federal Employee Retirement Income Security Act of 1974, which limits lawsuits against employer-sponsored health plans to federal court, where plaintiffs can recover only the value of the benefit that was denied. The ruling affects the legal rights of about 130 million Americans covered by employer-sponsored health plans and weakens patient-protection laws in Texas and nine other states that have granted patients the right to sue their HMOs for malpractice. The Supreme Court case consolidated separate lawsuits filed against Aetna and Cigna Corp. One lawsuit involved Juan Davila, who suffered from bleeding ulcers after Aetna denied him the brand-name painkiller prescribed by his doctor in favor of a cheaper generic alternative. The other lawsuit involved Ruby Calad, who suffered complications after Cigna discharged her from the hospital within one day of having undergone a complicated hysterectomy. -- by Laura B. Benko
Supreme Court rules in favor of managed care
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