Ruling blocks Texas HMO lawsuit, allows others to proceed

Judges hint that it's time for the full circuit court to reconsider ERISA case law.

By Tanya Albert, AMNews staff. Oct. 21, 2002.

A panel of federal judges has handed down a mixed ruling for the physician-patient relationship when it comes to making medical treatment decisions.

In September, the panel of the 5th U.S. Circuit Court of Appeals in Louisiana said three patients can go ahead with lawsuits against their HMOs in state court, but that a fourth patient's case could not proceed. Judges based their decisions on different subsections of federal law. They looked at the cases differently because the fourth case contained some claims that didn't fit under state laws when it was originally filed.

But that fourth case, Roark v. Humana Inc., eventually could lead to changes in the way federal courts look at lawsuits that HMO members file against their health plans when they believe that the company's actions delayed treatment.

In Roark, the panel of judges was asked to consider the language in a contract concerning "medically necessary treatment." It concluded that the federal Employee Retirement Income Security Act of 1974 preempts Robert Roark's claim. His lawsuit charges that his wife, Gwen, lost her leg and ultimately died because HMO decisions delayed a vacuum-assisted-closure device she needed to treat injuries from what was believed to be a brown recluse spider bite.

But the judges hinted that they may have ruled differently if they weren't bound by case law. A panel of the court cannot change case law; it takes the full circuit to do that.

"In this circuit, HMOs can escape all liability if they instruct their doctors to recommend every possible treatment and leave the real decision to HMO administrators," the court said. "It is difficult to believe that one of Congress' goals in passing ERISA was to shift medical judgments from doctors to plan administrators. If we were writing on a clean slate, or deciding this en banc, the Roarks would have a strong case against ERISA preemption. But, as a panel, we are bound by Corcoran." [...]