I'm shocked.
High Court Limits Patient Suits Vs HMOs
Mon Jun 21, 2004 11:08 AM ET
By James Vicini
WASHINGTON (Reuters) - A unanimous U.S. Supreme Court ruled on Monday that patients cannot sue health insurance companies under state law for refusing to pay for doctor-recommended medical care, a decision that could affect millions of patients.
The justices ruled that a 1974 federal law, the Employee Retirement Income Security Act, completely pre-empted such lawsuits brought in state court by patients who seek damages over the denial of appropriate medical care.
The decision was a victory for the U.S. Justice Department and insurers, which warned that allowing the lawsuits would drive up health care costs. Millions of Americans have medical insurance through employer-provided health plans governed by the 1974 federal law.
At issue was a 1997 Texas law that allowed patients to sue over their medical treatment. Nine other states -- Arizona, California, Georgia, Maine, New Jersey, North Carolina, Oklahoma, Washington, and West Virginia -- have similar laws.
The state laws have become important as Congress has been unable in recent years to adopt national legislation that would allow patients to sue their health maintenance organization in federal court for medical malpractice.
Supporters of the state laws argued that patients should be able to sue their managed care plans for the harm caused when needed health care has been denied.
