Ruling Could Increase HMOs Liability For Certain Decisions
The 2nd Circuit Court of Appeals recently issued a 2-1 ruling that could increase health plans liability for utilization-management decisions.
The court has given Bonnie Cicio, the plaintiff in Cicio v. Vytra Healthcare et al., permission to pursue a medical malpractice claim in state court against the health maintenance organization that covered her husband, Carmine Cicio, who died from blood cancer in May 1998.
The husbands doctor asked the HMO in January 1998 for coverage for high-dose chemotherapy and a stem-cell transplant. By the time the HMO agreed to cover the treatment, the husband was too sick to receive it.
The 2nd Circuit appeals court, which has jurisdiction over Connecticut, New York and Vermont, has held that most state HMO malpractice suits are preempted by the federal Employee Retirement Income Security Act, a law that limits benefit decision suits to federal courts.
But the Cicio ruling says plaintiffs can sue in state court when plans seem to exercise medical judgment while making benefit determinations. The Cicio case “must be treated as a mixed decision because it allegedly involved both an exercise of medical judgment and an element of contract interpretation,” Circuit Judge Robert Sack writes in an opinion explaining the ruling.
The HMO might have won if it had refused to “cover a given procedure without regard to what symptoms a patient presented,” the judge writes. In that case, he says, the HMO could argue that it had made no medical decision but had simply interpreted a benefit-plan contract.