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With little fanfare, a San Angelo, Texas, jury has handed down the first verdict in a managed-care medical-malpractice suit brought under Texas’ 1997 Health Care Liability Act as the federal debate over a patients’ rights bill continues in Washington, D.C. After an 11-day trial, the jury hearing Brewer v. Chang, et al. decided on July 2 that Terry Brewer’s health maintenance organization, his primary care physician and the hospital where he died had no liability for his death on June 16, 1998. “The system worked,” says John Scott, attorney for HMO Blue Southwest Texas. “They allowed a jury to decide. You can’t ask any more than that from an HMO’s standpoint and from a plaintiff’s standpoint,” says Scott, of counsel at Susman Godfrey in Dallas. Ryan Krebs, who represents Brewer’s widow and daughter, says he plans to appeal the verdict to Austin’s 3rd Court of Appeals. “The outcome in this case has only strengthened my resolve to pursue this matter. I firmly believe it was the wrong outcome,” says Krebs, a doctor and lawyer with the Law Office of Ryan Krebs in Austin. The plaintiffs, Doris Brewer and Laurie Schaeffer, the deceased’s widow and daughter, respectively, allege in their petition that Terry Brewer died at 49 of “biopsy-proven interstitial lung disease,” of which there are more than 150 different types. The petition alleges that HMO Blue repeatedly denied or failed to timely approve Terry Brewer’s doctors’ recommendations that he be referred to the National Jewish Lung Center in Denver, where his disease could be evaluated and treated. It also alleges that the HMO breached its duties to Brewer when it authorized him only one visit at a time to Scott and White Clinic in Temple, causing delays in his treatment. Krebs contends that 340th District Judge Rae Leifeste, who presided over the trial, excluded evidence that was important to the plaintiffs’ case — including testimony by medical experts and the first deposition given by Dr. Peter Chang, Brewer’s primary care physician. As alleged by Krebs, Chang initially testified that HMO Blue denied the doctor’s recommendation that Brewer be referred to the Denver lung center for treatment in September 1997. At the time of Chang’s first deposition, the HMO was not a defendant in the suit, Scott says. In his second deposition, Chang “flip-flopped” and testified that he didn’t recall making the referral to the lung center, Krebs alleges. “I don’t deem there to be the inconsistencies [in Chang's testimony] that the plaintiffs’ lawyer does,” says Dana Banks, who represents the doctor. Banks, a partner in San Angelo’s Smith, Rose, Finley, Harp & Price, says the judge acted on a motion by the HMO when he excluded the evidence of Chang’s first deposition. Scott says Krebs got in evidence of Chang’s initial deposition by impeaching the doctor’s testimony at trial. “We were limited to what we could get in,” Krebs says. “The judge gave a limiting instruction each time, and he would instruct me to move on.” Krebs says the result was that he was unable to get in critical evidence from Chang’s first deposition. In their petition, the plaintiffs allege that Chang originally misdiagnosed Brewer’s condition in March 1997 and failed to take appropriate steps to refer him to specialists and list him for a lung transplant. “I typically don’t comment on cases one way or another,” Banks says, but adds that the jury did not take long to reach a verdict. Krebs estimates that the jury deliberated for two-and-a-half to three hours. The plaintiffs’ petition alleges that the hospital failed to monitor Brewer properly while he received supplemental oxygen. Krebs alleges Brewer was disconnected from the oxygen when he was found in cardiac arrest on the floor of his hospital room on June 14, 1998. When Brewer requested assistance to go to the bathroom, a nurse had given him a urinal and left him alone for about 20 minutes, the lawyer alleges. Don Griffis, with Jackson Walker in San Angelo, represents Shannon Medical Center in the case but was on vacation and unavailable for comment by press time. Joyce McLaughlin, the hospital’s in-house counsel, did not return two phone calls seeking comment. Scott says the jury decided that the HMO was not liable for Brewer’s death. “HMOs don’t practice medicine,” he says. “They never have, and the evidence supported that contention.” NO EASY TASK The jury’s verdict came three days after the U.S. Senate approved a bill that would give patients more leverage in dealing with their HMOs. “This should calm folks down who worry about waves of liability if an accountability bill passes,” says Fort Worth attorney George Parker Young, who specializes in suing the managed-care industry. Young, a partner in Friedman, Young, Suder & Cooke, says HMO liability cases are difficult to win. He says his firm turns down 15 to 20 such cases for every one it takes. “This shows that trial lawyers who think about trying these cases have to be very, very careful because they can be lost,” Young says. According to Young’s records, between 15 and 25 HMO liability cases have been filed in Texas since the law took effect on Sept. 1, 1997. Young says he filed Plocica v. NYLCARE Health Plans Inc., et al., the first case brought against an HMO under the Texas law. The case was brought by the family of 68-year-old Joseph Plocica, who killed himself hours after his discharge from a 13-day stay at a psychiatric hospital. The case was “successfully resolved” in 2000 without a trial, Young says, but declines further comment. As the governor of Texas, President George Bush allowed the Health Care Liability Act to become law without his signature in 1997 and touted the measure during his presidential campaign last year. But Bush has threatened to veto a patients’ rights bill approved by the U.S. Senate on June 29. On June 30, the Fort Worth Star-Telegram quoted Health and Human Services Secretary Tommy Thompson saying that Bush intends to veto the bill if Congress fails to modify it before sending it to him. “This bill goes in the wrong direction,” Thompson is quoted as saying. “This is going to increase the number of uninsured and that, of course, is a problem. It’s a problem for the Congress, a problem for the administration, but more than that, it’s a problem for America.” Some HMOs have been able to get around Texas’ law by seeking to have the suits filed against them moved to federal courts, where they are tried under the Employee Retirement Income Security Act of 1974. The ERISA law, which governs private employer-paid pension and health plans, allows a plaintiff to recover only the value of the denied benefit. Young is an attorney for Gwen Roark, whose case was shifted to a federal court. U.S. District Judge Sidney Fitzwater of Dallas held on May 25 that the HMO liability claims in Roark and Roark v. Health Plan of Texas Inc., et al. were pre-empted by the ERISA law. These decisions “in large part nullify” the Texas law trumpeted by Bush in his run for the White House, Young says. Tom Mayo, a professor at Southern Methodist University Dedman School of Law and of counsel at Haynes and Boone in Dallas, says Senate Bill 1052 — passed by a 59-36 vote — would enable consumers to sue HMOs for damages in state or federal courts. If a claim involves medical malpractice, it could be filed in a state court under the Senate bill, Mayo says. The bill would impose a $5 million cap on punitive damages on state court awards, but state laws governing economic and noneconomic damages would still stand. Kirsten Voinis, spokeswoman for state Sen. David Sibley, a Waco Republican who sponsored the 1997 patients’ rights legislation, says damages are limited by a tort reform passed by Texas lawmakers in 1995. Under the 1995 law, the cap on punitive damages is either two times the amount of economic damages plus up to $750,000 in noneconomic damages, or $200,000, whichever is greater, Voinis says. The ERISA law limits a plaintiff’s recovery to the value of the benefit that was denied by an HMO, Mayo says. Mayo says the Senate bill allows a consumer to file a suit in federal court when he has a contractual claim dispute, including the denial of benefits provided under a health plan. In a federal suit, he could seek unlimited damages for lost wages, pain and suffering and up to $5 million in punitive damages. “It’s quite attractive from a plaintiff’s point of view,” Mayo says. An amendment added by Sen. Fred Thompson, R-Tenn., on a 98-0 vote, would require consumers to present their claims to an independent review board before suing an HMO. Mayo says a bill being pushed by House Republicans would permit an HMO to be sued if it acts contrary to the recommendations from an independent review. H.R. 2315, the Republican-backed bill, also would permit a claim based on the delay in getting treatment that is initially denied but then authorized after the external review, he says. If a suit is successful, a plaintiff could collect unlimited economic damages and up to $500,000 in noneconomic damages but would receive no punitive damages under the Republicans’ House bill, Mayo says. Mayo says he’s “pretty darn sure” that the House will pass a bill. But if H.R. 2315 is the measure considered, he predicts it will be heavily amended. The pressure then will be on a conference committee — made up of House and Senate members — to get a bill out that either won’t be vetoed or is “veto proof,” Mayo says.

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