New call for patients' bill of rights
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June 28, 2004 01:00 AM

New call for patients' bill of rights

Docs worry ruling limiting HMO suits will boost medical malpractice filings

Laura B. Benko
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    Calls for a national "patients' bill of rights" were rekindled last week in the wake of a controversial Supreme Court ruling that severely limited patients' ability to sue their managed-care plans in state courts-a decision that physician organizations said could ultimately lead to more malpractice lawsuits against doctors.

    In a unanimous decision, the high court dismissed negligence lawsuits filed against Aetna and Cigna Corp. by two Texas patients who claimed the HMOs had wrongly denied them coverage for necessary medical care, which led to additional complications. The suits were filed under Texas' landmark Health Care Liability Act of 1997.

    The justices ruled that such state lawsuits are "completely pre-empted" by the federal Employee Retirement Income Security Act of 1974, which restricts actions against employer-sponsored health plans to federal court, where plaintiffs can recoup only the value of the benefit that was denied-often no more than a few thousand dollars. By contrast, state courts can award plaintiffs millions of dollars for pain, suffering, lost wages and other costs.

    Providers were quick to criticize the ruling, arguing that health plans will now have very little incentive to approve costly but medically necessary treatments, and that more physicians will be left holding the bag for mistakes made by HMOs playing doctor.

    "This decision puts a shield around managed-care companies, thereby leaving physicians as the only ones now subject to tort actions resulting from bad treatment decisions-decisions that the physicians didn't even make," said Bohn Allen, president of the Texas Medical Association.

    Consumer groups and legislators denounced the ruling as a major setback in states' efforts to establish patients' rights laws at a time when Congress has stalled over the issue. Since Texas' law took effect seven years ago, 10 other states have passed similar legislation allowing patients to sue their HMOs for malpractice.

    "This puts the whole patients' rights issue back on the front burner," said Frank McClellan, a healthcare law professor at Temple University's Beasley School of Law. "Either Congress will have to clean up its own mess or the public will respond in a political way to Congress' failure to act."

    Indeed, Rep. John Dingell (D-Mich.) vowed last week to reintroduce the federal patients' rights bill passed by the Senate in 2001. The bill would have allowed patients to sue health insurers for malpractice, with no limit on damage awards. A House version backed by the Bush administration had stricter limits on patient lawsuits; the two bills were never reconciled.

    Rep. Charlie Norwood (R-Ga.), who championed the House bill, said the ruling is "clearly a blow" but added it would not hamper the patients' rights movement. "I have always believed that the job of making public policy belonged to Congress, not the courts," he said in a news release.

    Meanwhile, Sen. John Kerry (D-Mass.) used the ruling as an opportunity to stump for his presidential candidacy, outlining his plan to strengthen the healthcare system and "protect patients from HMO misconduct." "Three years ago, we passed a bipartisan, enforceable Patients' Bill of Rights. It is time for us to pass it again, for the House to pass it and for the president to sign it," Kerry said at the Service Employees International Union's 2004 convention last week.

    The high court's decision addressed the fine line between coverage decisions and medical decisions. One suit involved a man who suffered from bleeding ulcers after Aetna refused to cover a brand-name painkiller prescribed by his doctor in favor of a cheaper generic alternative.

    The final ruling was hailed as a major victory for insurers, which have watched their protections under ERISA be whittled away by the courts in recent years. But insurers are already gearing up for a renewed legislative battle. The industry had lobbied hard against a patients' bill of rights, arguing that it would increase healthcare costs and lead to more uninsured.

    "We think this is the worst possible time to be talking about legislation that would expose the industry to more costly and time-consuming lawsuits," said Susan Pisano, spokeswoman for America's Health Insurance Plans.

    Insurers prefer coverage disputes to be settled through external review-an independent appeals process available to patients and doctors in 44 states and the District of Columbia-but one was not employed by either of the Texas plaintiffs or their physicians, said James Klein, president of the American Benefits Counsel, which represents private companies that sponsor retirement and health plans for more than 100 million Americans.

    "The refusal of the plaintiffs or their doctors to follow the procedures to either have the plan decision promptly reviewed, or to go forward with their preferred medical course of action, even if their eligibility for financial reimbursement was in doubt, makes the plaintiffs' lawsuits far less justifiable," Klein said.

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