Ruling Favorable To HMOs Stirs Call For Patient Rights Bill
After the U.S. Supreme Court ruled unanimously in favor of protecting employer-sponsored health plans against state lawsuits involving benefit determinations, various members called for Congress to pass “patient rights” legislation.
Rep. John Dingell, D-Mich., says he is introducing a “patient rights” bill in the House. Sponsors of a Senate patient rights bill probably will include Sens. John Edwards, D-N.C.; John McCain, R-Ariz.; Edward Kennedy, D-Mass.; and Sen. John Kerry, D-Mass., the likely Democratic presidential nominee, who has added calls for passage of a patient rights bill to his stump speech.
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The high court’s ruling, which resolves the Aetna Health Inc. vs. Davila and CIGNA Healthcare Inc. vs. Calad cases, supports insurers’ argument that the federal Employee Retirement Income Security Act of 1974 preempts state efforts to let patients sue private employers’ benefit plans in state court.
By shielding plans from big state court damage awards, the ruling could cut coverage costs or increase health plan profits.
Because of uncertainty about liability exposure, benefit plan administrators have been charging employers about $2 per employee per month to bear the burden of liability risk, according to John Piro, a senior legal consultant in the Norwalk, Conn., office of Hewitt Associates.
Benefits experts speculate that the Davila ruling also could encourage employers to take a bolder approach to plan design and administration, health care experts say. “Theres already been a trend back toward self-insurance,” Pirro says. “This might accelerate the trend.”
The American Medical Association, Chicago, is warning that the Davila ruling could put members of ERISA plans at the mercy of plan administrators’ whims.
“Managed care plans will now have very little incentive to approve expensive but medically necessary treatments,” says Dr. John Nelson, the association’s president.
But Pirro and others interviewed say market forces and worries about the possibility of Congress weakening the ERISA preemption provisions probably will moderate the effects of the Davila ruling.
The Davila ruling deals solely with interpretation of ERISA and draws no conclusions about the validity of the plaintiffs’ claims.
The plaintiffs, Juan Davila and Ruby Calad, are Texas residents who belonged to employer-sponsored health maintenance organization plans.
A Texas law, the Texas Health Care Liability Law, let patients sue HMOs that failed to exercise “ordinary care” when making determinations about the “medical necessity” of proposed treatments. States that enacted similar laws include Arizona, California, Georgia, Louisiana, Maine, New Jersey, Oklahoma, Washington and West Virginia.
Davila says Aetna’s refusal to cover a brand-name arthritis medication led to severe internal bleeding that nearly killed him.
Calad blames hysterectomy complications on CIGNA’s refusal to let her stay in the hospital more than 1 day after surgery.