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A recent appellate court decision proves that the U.S. Supreme Court did not entirely shut down lawsuits against health maintenance organizations (HMOs) at the end of this year’s term. In Klay v. United Healthgroup Inc., No. 02-16640, the 11th U.S. Circuit Court of Appeals ruled on June 30 on pretrial matters in a class action brought by more than 900,000 doctors “alleging that [several large HMOs] conspired to systematically underpay them for their medical services,” in the court’s words. Just days before, on June 21, the U.S. Supreme Court ruled that state statutes and case law imposing a duty of care on HMOs are pre-empted by the Employee Retirement Income Security Act (ERISA). The unanimous high court decision in Aetna Health Inc. v. Davila, No. 02-1845, means that patients can’t recover under state law for any worsening of their condition as a result of denial of coverage. But Davila left untouched the doctors’ claims for breach of contract and violations of the Racketeer Influenced and Corrupt Organizations Act. Some questions remain. Can patients expect to see their rights vindicated through suits brought by their doctors? If not, does Davila leave open any avenues for patient suits? The Klay litigation made news last year when two of the original defendants, Aetna Inc. and Cigna Healthcare, agreed to settlements that are expected to cost them more than $470 million and $700 million, respectively. Lead plaintiffs’ attorney Harley S. Tropin of Miami’s Kozyak Tropin & Throckmorton, said: “When you help doctors, you will ultimately help patients.” But he conceded that the litigation “will not be a substitute for lawsuits based on denial of coverage or injuries due to substandard care.” Moreover, the lawsuit has been slow going. Last month’s 11th Circuit decision, for instance, resolved pretrial issues-regarding what claims are subject to arbitration-that had first been raised in the trial court in 2000. Lawyers for the defendant HMOs declined to comment. Pressure on doctors? Wendy K. Mariner, a professor at Boston University’s schools of law, public health and medicine, said that Davila may prompt patients to bring pressure to bear on their physicians. Patients can still sue their doctors for substandard treatment, even if the doctors felt that their treatment options were constrained by an HMO’s edicts on the extent of coverage, according to Mariner. She added that such suits may increase in the wake of Davila. In addition, Davila “may encourage patients to put pressure on physicians to appeal benefit denials and to assert that treatments are medically necessary,” she said. Mariner said that the law’s rigid distinction between treatment decisions and coverage decisions, which lies at the heart of Davila, often doesn’t do justice to a “very blurry” reality. Seeking to strengthen ERISA Although Justice Ruth Bader Ginsburg concurred in Davila, she also wrote separately to make a plea that either Congress or the federal courts allow patients to be fully compensated for wrongful denials of coverage under ERISA. Currently, ERISA allows a patient to recover only the cost of the treatment that should have been approved. Ginsburg suggested that ERISA’s remedy provisions be construed more expansively-to allow recovery for consequential damages such as the worsening of a condition-in light of HMOs’ duty under ERISA to act as fiduciaries for plan participants. Mariner noted that only one other justice, Stephen Breyer, joined Ginsburg’s opinion. That may mean that proponents of a patient’s right to sue HMOs may have to look to Congress for an answer to Davila. Young’s e-mail is [email protected].

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