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ATTORNEY: John Scott, of counsel at Dallas’ Susman Godfrey CASE: Brewer v. Chang, No. A-9901336-C DEFENSE ATTORNEYS: No others on behalf of HMO Blue Southwest Texas. JUDGMENT: On July 2, a jury found that none of the defendants — neither HMO Blue, nor the primary care physician nor the hospital — was liable for patient Terry Brewer’s death in June 1998. The jury deliberated for less than an hour after an 11-day trial. CLAIM: Brewer died at age 49 of interstitial lung disease. The suit, brought by his widow and daughter, claimed that HMO Blue created a system that promoted cost savings over the medical well-being of and quality of care to patients. The plaintiffs alleged that referrals to specialists were denied when appropriate because of financial incentives for doctors not to spend money. Specifically, the suit alleged that the HMO repeatedly denied or failed to approve in a timely fashion Brewer’s doctor’s recommendations that he be referred to the National Jewish Lung Center in Denver and the Scott & White Clinic in Temple, Texas. SIGNIFICANCE: The suit was the first verdict in a managed care medical malpractice suit brought under Texas’ 1997 Health Care Liability Act. The claim against the HMO was for about $9 million, but the bigger issue was whether an HMO could ever win one of these cases. “HMOs over the last four years have had a very poor run at the courthouse,” said Scott. “At a national level, HMOs have not only lost, they’ve lost a great deal of money each time they’ve lost one of their cases.” KEY HURDLES: Voir dire took two days and Scott eliminated many people from the 200-person panel who, through direct questions on the subject, said they didn’t like HMOs or had had a bad experience with them. Once the trial began, Scott said, he needed to paint a picture to the jury of what the HMO does and doesn’t do. “We wanted to distinguish early on that the HMO does not practice medicine. It makes a decision about whether a claim is covered or not covered,” he said. This was critical, he explained, because many people don’t understand the way the system works, that there is a procedure in place for appeals of decisions and that, ultimately, a doctor can pick up the phone and talk to an HMO medical director if there’s an emergency. Most of the time, if there’s a denial it’s based on a lack of information, he said. “A medical director makes a decision based on what’s before him.” Getting that message through to the jury was difficult, said Scott. “It’s a tough sell because so many people have a perception that each one of those decisions are final and some people have had a bad experience.” Scott also had to convince the jury that a system that calculates payments to doctors based on utilization of services, did not affect care. DEFENSE RESPONSE: Scott got the doctors, including the plaintiffs’ expert, to say that they did not ever make medical decisions based on how they are going to be paid. “From a logical perspective, they had to answer yes to that on cross. If the doctor answers anything else, he opens himself up to malpractice.” Scott said jurors polled afterward said that admission carried a lot of weight in their decision. Scott also vigorously challenged the admission of experts and succeeded, he said, in limiting them to areas he felt they were really qualified. Once on the stand, he attacked one of the plaintiffs’ key experts, Linda Peenow, a doctor who had worked for an HMO. She testified about how the HMO uses financial incentives so that care is negatively effected. Scott showed the financial benefit to her in becoming an expert. She had gone from being a medical reviewer making $50 an hour to an expert making about $550 an hour. KEY TO VICTORY: Scott did not call any witnesses because, he believed, the jury could best understand the case through his cross-exam of the plaintiffs’ 15 or so witnesses. He feared calling defense witnesses, such as the HMO executives, because he believed their testimony could lead to negative feelings by jurors toward the defense. “It was a classic case,” said Scott. “The person with the most witnesses was going to lose. Everybody that was calling witnesses was getting them eaten up alive.” He also believed that he had established such a good rapport with the jury that he believed his own face — rather than other witnesses — could best humanize the HMO for the jury. If jurors didn’t like a witness who was an HMO executive, he feared, he’d risk losing control of “the face” of the HMO, he said. In the end, he said, “it’s always a credibility contest. Whoever has the most credibility wins the trial.”

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