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Multimillion-dollar med-mal verdicts against nursing homes and hospitals in Texas are as common as a cold, but health maintenance organizations never have shared the pain. That changed on June 28 when a jury in Dallas’ 191st District Court socked Cigna Healthcare of Texas with a $13 million verdict — $10 million of it in punitives — in a case in which the plaintiffs accused the HMO of putting its cost-saving measures ahead of a patient’s life. It’s the first time that plaintiffs have prevailed in a case tried under � 88.001 of the Civil Practices and Remedies Code that allows HMOs to be sued for liability in medical-malpractice cases. In the five years since the Texas Legislature passed the Health Care Liability Act, only 20 or 30 such cases have been filed against HMOs, several med-mal lawyers say. It’s hardly been the flood of cases that managed health care organizations predicted at the time the law passed. The dense nature of the litigation, along with the Employment Retirement Income Security Act, which pre-empts many of those cases, make cases such as Dorothy Pybas and Shari L. Denton v. CIGNA Healthcare of Texas rare, med-mal lawyers say. But a series of factors worked in favor of the plaintiffs — family members of 83-year-old heart patient Herschel Pybas — who alleged that Cigna officials pushed Pybas out of a medical care facility to his home. Pybas, who needed 24-hour care, died at a hospital in 1999 six days after he was discharged from a skilled nursing home facility. Cigna allegedly moved Pybas from the nursing home facility to contain costs. Pybas was a member of a Cigna HMO plan that was not exempted by ERISA, which prevents about 80 percent of HMO cases from being litigated in state court. The plaintiffs were able to introduce damaging evidence, including documents that showed Cigna employees who were responsible for overseeing Pybas’ medical costs were paid bonuses for keeping patients out of hospitals during the time Pybas was a member of CIGNA’s HMO plan. Cigna’s lawyer, Dallas solo James L. Johnson, did not return calls for comment by press time on July 3. F. David Feng, a Cigna spokesman, says the company is considering its options, including post-trial motions and appeal. “We are disappointed with this outcome; however, we will continue to stand by our employees and our organization,” Feng says. “We empathize with Mr. Pybas’ family, but believe the decision in this case is not supported by the evidence.” According to plaintiffs’ attorneys in the case, the defense argued that the HMO was not the proximate cause of the death of Pybas, a man who had serious health problems. The plaintiffs’ lawyers say they hope they’ve made a statement with the unusual win. “I think the real lesson in this case is that Texas juries are not going to tolerate HMOs and insurance companies blatantly placing profits over patient safety — especially giving their employees bonuses in exchange for minimizing the care of the members of the HMO,” says J. Don Gordon, a partner in Sherman, Texas’ Hynds & Gordon who represented Pybas’ widow, Dorothy Pybas. A RARITY The main reason HMO patient liability cases are rare in Texas is most are pre-empted by ERISA, which protects employee benefits paid by employers and, with a few exceptions, supersedes almost all state laws that affect employee benefit plans. Pybas’ family sued under the Texas law because Pybas’ HMO policy was not offered by an employer. Pybas opted for a Cigna HMO plan offered to senior citizens as an alternative to the federal Medicaid health care benefits plan. Other cases against HMOs have settled in Texas, but Cigna’s lawyer would not engage in serious settlement talks, says George Parker Young, of Fort Worth’s Law Offices of George Parker Young. His firm represented Shari Denton, Pybas’ daughter. “What was weird about this case is CIGNA would not seriously talk to us,” Young says. “They offered us $150,000 before trial, and we couldn’t consider that seriously.” At trial, Young and Gordon alleged that the company had tried from day one to oust Pybas from the skilled nursing home in Sherman where he received 24-hour care for numerous heart-related problems. HMO administrators promised Pybas’ doctor that he would receive home assisted health care comparable to the skilled nursing home, but when he arrived, his home was not fitted with essentials, such as an oxygen system, the plaintiffs alleged. The defense argued that an oxygen system was not requested. Pybas’ condition deteriorated after he went home, the plaintiffs maintained. He subsequently died at a hospital. What got the jury’s attention, says Gordon, was information about the bonuses paid to HMO administrators around the time Pybas was a member of the plan. One nurse who tracked Pybas’ case received a $500 bonus immediately before and after Pybas died, Gordon alleges. He believes the jury didn’t like it one bit. “They kept telling us they came back to that,” he says. The jury awarded Pybas’ family $3 million in actual damages and $10 million in exemplary damages. Damages caps in the verdict were exempted because the jury made an affirmative finding that Cigna, by act or omission, knowingly or intentionally caused serious bodily injury to Pybas, Gordon says. The jury could easily have gone the other way, as happened in San Angelo nearly one year to the day before Pybas was tried. In Brewer v. Chang, et al., the first case to go to trial under 1997′s Texas statute, � 88.001 of the Civil Practices and Remedies Code, resulted in a defense verdict for HMO Blue Southwest Texas. John Scott, a partner in Dallas’ Scott Yung who defended the HMO in Brewer, says plaintiffs have a hard time proving that an HMO had a role in a patient’s death. “One of the difficulties the plaintiff has in these cases is the causation issue,” Scott says. “There is going to be a question as to whether there was medical malpractice. And it’s tough to show that an HMO actually caused a death or serious injury.” On the other side, he says, it’s tough for defense lawyers to combat company records that indicate an HMO offered financial incentives to employees who kept costs low. “It’s horrible,” Scott says of the prospect of explaining HMOs’ financial incentive programs. “The financial incentives and different aspects of the commercial aspect of the case are very difficult to explain to the jury, and that’s why a lot of the different HMOs are getting rid of the financial incentive aspects of the program.” John Scully, a partner in Dallas’ Cooper & Scully who defends HMOs, says there’s a reason for the cost-saving measures — they provide greater access to affordable health care — a point that can be made to juries. “We have found that when all the facts come to light and the entire system is explained, and the efficiencies of medicine that can be accomplished through health maintenance organizations, that people are much more understanding and appreciative of the true goals,” Scully says. Scott says undertaking such cases is financially draining for plaintiffs lawyers. Young says the Pybas case cost between $50,000 and $100,000 to litigate, including payments made to expert witnesses. Nevertheless, Young says he was able to counteract arguments that Cigna’s policies did not contribute to the death of the medically fragile elderly patient. “He was real old, and he had a lot of health problems,” Young says. “But we told the jury that’s when the patient needs the HMO the most to step up.”

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