http://story.news.yahoo.com/news?tmpl=story&cid=568&e=3&u=/nm/20040621/bs_nm/court_health_dc
WASHINGTON (Reuters) - The U.S. Supreme Court (news - web sites) ruled on Monday that patients cannot sue their health maintenance organizations under state law for refusing to pay for doctor-recommended care, a decision that could affect millions of patients.
The justices unanimously ruled that a 1974 federal law, the Employee Retirement Income Security Act, completely pre-empted such lawsuits brought in state court by patients who seek damages over the denial of appropriate medical care.
The decision was a victory for the U.S. Justice Department (news - web sites) and insurers, which warned that allowing the lawsuits would drive up health care costs. Millions of Americans have medical insurance through employer-provided HMO health plans governed by the 1974 federal law.
At issue was a 1997 Texas law that allowed patients to sue HMOs over their medical treatment. Nine other states -- Arizona, California, Georgia, Maine, New Jersey, North Carolina, Oklahoma, Washington, and West Virginia -- have similar laws.
The state laws have become important as Congress has been unable in recent years to adopt national legislation that would allow patients to sue their health maintenance organization in federal court for medical malpractice.
Supporters of the state laws said patients should be able to sue their managed care plans for the harm caused when needed health care has been denied.
George Parker Young, an attorney for two patients who sued, said the ruling underscored the need for President Bush (news - web sites) and Congress to renew their commitment to approve legislation for a national patient's bill of rights.
Ron Pollack, executive director of the consumer group Families USA, blasted the ruling and called it a blank check for HMOs to deny care without fear of being sued in state court.
"The decision takes HMOs off the hook from any liability when they deny needed healthcare, even when improper denials have tragic consequences," Pollack said.
An industry group, the Pharmaceutical Care Management Association, hailed the decision.
PREDICTABILITY AND UNIFORMITY
The group's president, Mark Merritt, said, "The court has signaled that predictability and uniformity in employee-benefit design trumps the personal-injury lawyer agenda. This ruling will reverberate across the employee-benefit landscape for years to come."
The pair of cases involved units of Aetna Inc. (NYSE:AET - news) and Cigna Corp. (NYSE:CI - news). One lawsuit had been brought by Juan Davila, who was covered by an Aetna health maintenance organization through a plan provided by his employer.
In 2000, Davila's primary care physician prescribed the pain-killer "Vioxx" for his arthritis. Before filling the prescription, Aetna required Davila to try two other less-expensive medications.
After three weeks on the cheaper pain reliever, Davila was rushed to the emergency room, suffering from bleeding ulcers.
The other lawsuit involved Ruby Calad, who was discharged from the hospital in 1999 after a hysterectomy. Cigna's nurse decided the standard one-day hospital stay would be sufficient, although Calad's doctor had recommended a longer stay.
Several days after her release, Calad suffered complications. She then sued.
In an opinion by Justice Clarence Thomas (news - web sites), the justices reversed a U.S. appeals court ruling that the two lawsuits could proceed.
The Justice Department argued that allowing lawsuits under the state law would undermine the system set up by Congress under the 1974 federal law to encourage employers to adopt health insurance plans for their employees.
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