The new president of the American Medical Association decried the U.S. Supreme Court decision that effectively overturns a Texas law providing patients the right of action against HMOs for denying payments for physician-recommended treatments, calling it "a sad day for America's patients and the physicians who care for them."
In a unanimous decision that has broad implications for the managed-care industry, the high court ruled Monday against two Texas patients--one of whom had sued Aetna, the other Cigna Corp.--in state court over the health plans' failure to pay for care the patients' physicians deemed necessary.
John Nelson, M.D., a Utah OB/GYN elected AMA president this month, said in a prepared statement the decision "eliminates state legal accountability for managed care plans that alter, delay or deny a physician-recommended course of treatment. Now, patients' only recourse is through the federal courts where they cannot receive damages for harm caused by denial of treatment, only for the value of the benefit denied."
By controlling purse strings, plans were in effect deciding what is medically necessary and what is not, thus, Nelson said, "plans can now practice medicine without a license, and without the same accountability that physicians face every day."
But Justice Clarence Thomas, who wrote the decision, declared that the state lawsuits are "completely pre-empted" by the federal Employee Retirement Income Security Act of 1974.
ERISA limits lawsuits against employer-sponsored health plans to federal court, where plaintiffs can recover only the value of the benefit that was denied (see "Supreme Court rules in favor of managed care").
The justices dismissed the suits against Aetna and Cigna, filed separately under a 1997 Texas patient-protection law. The suits were combined on their way to the Supreme Court.
The two HMO enrollee plaintiffs claimed their plans' denial of medical coverage led to more medical troubles.
It is now up to Congress whether patients are to be afforded rights of action against HMOs similar to those sought by legislatures in Texas and at least nine other states that passed patient bill of rights laws. But the most recent attempts at federal legislation in this area foundered on partisan differences, and time is running short for any legislative action this year.
President Bush was governor of Texas when the 1997 legislation was passed, and he allowed the bill to become law without his signature.
In a 2000 presidential debate with then-Vice President Al Gore, Bush said he helped form bipartisan support for passage of the Texas law, but administration attorneys opposed the Texas plaintiffs' case before the Supreme Court earlier this year.
Meanwhile, Democratic presidential candidate Sen. John Kerry (D-Mass.), in a speech today in San Francisco, called for passage of a federal patient bill of rights.
With the current congressional session winding down and with the political focus shifting to the November election, an AMA source conceded there is little hope that federal patients' rights legislation will pass any time soon.
Meanwhile, both Cigna and Aetna expressed pleasure at the judicial outcome.
"Aetna is pleased by the Supreme Court's unanimous decision . . . and reaffirmation of the law applicable to employer-sponsored health plans," the company said in a prepared statement. "For 30 years the Employee Retirement Income Security Act (ERISA) has helped employers provide consistent, affordable health benefits to their employees. It also affords those employees a prompt, fair and efficient means for quickly resolving coverage disputes. By affirming the role of ERISA in employee benefits the Court has helped to assure that millions of working Americans will continue to have access to quality health coverage provided by their employers."
"We are pleased with the Court's decision," Cigna said in a similar statement.