Patients look to federal courts for green light to sue HMOs

Health plans say ERISA's protection against lawsuits is still intact and that cases brought by their subscribers shouldn't be allowed to go forward.

By Tanya Albert, AMNews staff. May 6, 2002.

It's a long shot, but a federal appeals court could give patients the chance to hold their HMOs accountable for medical decisions.

The 5th U.S. Circuit Court of Appeals panel is set to hear oral arguments May 6 in three Texas cases involving patients who want to sue their health plans for harm they say they sustained when company officials made medical decisions.

In separate decisions, lower federal courts ruled against these patients. And, in a similar case decided in the early 1990s, the 5th Circuit, which covers Texas, Louisiana and Mississippi, blocked a patient from pursuing a medical malpractice claim against her HMO. At that time, the court held that the Employee Retirement Income Security Act of 1974 prevented lawsuits against health plans.

But some say more recent rulings at the federal appeals level and from the U.S. Supreme Court have chipped away at the protection ERISA offers.

"You have some developments at the Supreme Court level that the 5th Circuit never looked at," said Fort Worth, Texas, lawyer George Parker Young, who is arguing the three cases before the court. "The Supreme Court said 'this [protection] is not as broad as we initially indicated.'"

Still, if the panel of judges hearing the case in May rules in favor of the patients, their opinion wouldn't automatically change case law, he said.

One panel of judges from the 5th Circuit Court cannot overturn an earlier decision by another panel. Therefore, because the court in 1992 ruled that a patient could not pursue a claim against a health plan, the full 5th Circuit would need to consider the case and decide to alter its previous position, he explained. [...]