Patients who claim that they have been injured or damaged by payors' adverse payment decisions have sued them on a number of occasions. In many of the early cases involving these issues, the Courts said that the Employee Retirement Income Security Act (ERISA) precluded or pre-empted such suits. (ERISA is a federal statute that was enacted to help prevent passage of conflicting laws in multiple states that would make it difficult for health plans to operate in different states.)
In more recent cases in which patients claimed that health plans and staff members such as case managers were negligent, the Courts said patients could sue for negligence based upon state laws.
Now the U.S. Supreme Court has decided two (2) cases related to this issue:
- Aetna Health, Inc. v. Davila. In this case Mr. Davila's doctor prescribed Vioxx . Aetna's formulary required patients to try alternate, less expensive medications first. So Davila took Naprosyn. He subsequently suffered massive internal bleeding and ended up in the emergency room.
- Cigna HealthCare of Texas, Inc. v. Calad. In this case, Cigna generally allowed one day of acute care following a hysterectomy. Ms. Calad's surgeon recommended a longer stay but Cigna's case manager declined to authorize additional days of acute care. Calad returned home after one (1) of post-surgical care. She, too, suffered complications and ended up in the emergency room.
The U.S. Supreme reversed the decision of the 5th Circuit Court. The Court said that Davila and Calad could have sued their plans under ERISA since their complaints were, according to the Court, based only upon denials of coverage under employee benefit plans regulated by ERISA. The Court said that Calad and Davila could have paid for the treatment themselves and then sought reimbursement.
In addition, the Court clearly rejected Davila's and Calad's claim that their plans violated a duty of ordinary care under a state statute inTexas stating that the plans could not be liable for denials for treatments not covered by the plans.
The Court also rejected Davila and Calad's argument that ERISA does not apply because their claims were based on tort or personal injuries as opposed to contract theory. "Distinguishing between pre-empted claims based on the particular label affixed to them would elevate form over substance and allow particular parties to evade the pre-emptive scope of ERISA simply by relabeling their contract claims as claims for tortious breach of contract," said the Court.
The Court further concluded that ERISA benefits determinations generally are fiduciary acts. "The fact that a benefits determination is infused with medical judgments does not alter this result," said the Court. This conclusion was based on the fact that the health plans involved were not Davila's and Calad's treating physicians or the employers of their treating physicians. The Court called the plans' actions in this case "pure eligibility decisions."
Case managers should, however, bear in mind the following with regard to this decision:
(1) Texas is not the only state that has enacted a statute that allows patients to sue their plans. Other states with different statutes may make the argument that this case applies to the statute in Texas only and that statutes in their states still permit suits against health plans.
(2) The Court seems to have left open the possibility of liability if the plan's employees actually provided treatment to patients who were injured or damaged.
There are still unanswered questions with regard to the liability issues addressed in this decision. Case managers must continue to monitor developments in this area.
Elizabeth E. Hogue, Esq.
ehogue5(at)comcast.net
15118 Liberty Grove
Burtonsville, Maryland 20866
Office: 301-421-0143
Copyright, 2004.
