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A state medical malpractice claim against an HMO medical director who refused to approve a cancer therapy advocated by a treating physician is not automatically pre-empted by the Employment Retirement Income Security Act (ERISA), a federal appeals court has ruled. Deciding a case of first impression, a divided 2nd U.S. Circuit Court of Appeals said the HMO’s refusal to sanction a cancer treatment was more than a matter of simply interpreting benefits under the patient’s health care plan. According to the comprehensive scheme outlined by the federal ERISA statute, interpreting benefits would be a matter exclusively for the federal courts. But in Cicio v. Vytra Healthcare, 01-9248, the court was confronted with a so-called “mixed eligibility and treatment decision,” the likes of which have led the U.S. Supreme Court in recent years to shift direction on pre-emption under ERISA. The issue arose when Carmine Cicio’s oncologist asked Vytra to approve coverage for a particular treatment known as “tandem stem cell transplant.” Vytra’s medical director, Dr. Brent Spears, concluded that the proposed treatment fell under an exception for coverage of procedures considered “experimental” or “investigational.” Later requests for reconsideration of this decision were rejected, and Cicio died in May 1998. His widow, Bonnie Cicio, filed a complaint in Suffolk County Supreme Court that was removed to the Eastern District of New York, where Judge Joanna Seybert agreed with a magistrate’s recommendation that the plaintiff was seeking to “enforce the terms” of an employee benefit plan. Seybert granted Vytra’s motion to dismiss the claims as pre-empted under �� 502(a) and 514(a) of ERISA. On the appeal, the 2nd Circuit agreed with Seybert’s dismissal of some of the claims made by Cicio, but disagreed on the medical malpractice claim. Judge Robert D. Sack said the 2nd Circuit’s task was to determine “whether the plaintiff’s medical malpractice causes of action ‘relate to the benefits plan’ administered by Vytra, keeping in mind both the U.S. Supreme Court’s warning that state law regulation of medical practice is not to be lightly disturbed, and the observation that ERISA’s primary focus is the protection of contractual rights defined by benefits plans.” Other courts have followed what Sack called a “categorical distinction” between quality-of-care decisions and questions of benefit administration under ERISA. But the 2nd Circuit, he said, was skeptical of any “line of reasoning” that would draw from ERISA, which was designed to protect employee benefit plans, “the elimination of protective standards of professional conduct.” Sack cited the case of Pegram v. Herdrich, 530 U.S. 211 (2000), as an example of where the U.S. Supreme Court has “rejected the notion that any finely filigreed connection between ERISA and a state law establish ERISA preemption.” CONGRESSIONAL PURPOSE Instead, he said the Supreme Court “has held that a court must begin with the presumption that ‘in the field of health care, a subject of traditional state regulation, there is no ERISA preemption without clear manifestations of congressional purpose.’” Judge Sack said that “the mere presence of an administrative component in a health care decision no longer has determinative significance for purposes of preemption analysis when the decision also has a medical component.” “We conclude that a state law malpractice action, if based on a ‘mixed eligibility and treatment decision,’ is not subject to ERISA preemption when that state law cause of action challenges an allegedly flawed medical judgment as applied to a particular patient’s symptoms,” he said. One of the problems facing courts confronted with mixed eligibility and treatment decisions, he said, “is it would likely often be difficult to delve into physicians’ minds to examine their decisions, which are frequently executed in very brief time periods and under tremendous pressures, to determine what part of them is medical and what part is administrative.” Therefore, Sack said, in the context of such mixed decisions, “we conclude that Section 514 preemption does not obtain with regard to those claims predicated on the violation of a state tort law by failure to meet state-law defined standard of care in diagnosis or recommending treatment,” of what the Supreme Court called a plaintiff “patient’s constellation of symptoms.” The court remanded the case to Judge Seybert for further proceedings. Dissenting in part, Judge Guido Calabresi declined to join the portion of the majority’s opinion on the medical malpractice claim. The judge asked, “If ERISA were not there, would this suit essentially be against an insurance provider for negligently failing to give the coverage contracted for, or would this suit be against a medical care provider for negligent failure to treat?” “Because I think that the current suit is clearly of the first sort, I regretfully conclude that it is barred,” he said. Judge Barrington D. Parker Jr. joined in the majority opinion. David L. Trueman of Mineola and Joel J. Zeigler of Greshin, Ziegler & Amicizia in Smithtown, N.Y., represented Bonnie Cicio. Michael H. Bernstein and Colleen A. Tan of Sedgwick, Detert, Moran & Arnold represented Vytra Healthcare and Spears.

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