The following articles give us some insight into what was discussed yesterday in oral arguments before the U.S. Supreme Court in the combined cases of Aetna Health Inc v. Davila, No. 02-1845, Cigna Healthcare of Texas v. Calad, No. 03-83. The main issue being argued is whether ERISA completely preempts state-law claims by ERISA plan participants or beneficiaries against an HMO where the claims challenge an HMO’s decision to deny coverage of treatment or care that was prescribed by the claimant’s physician but that the HMO decided was not authorized under the plan’s “medical necessity” provision.
The New York Times: “Justices Hear Arguments About H.M.O. Malpractice Lawsuits“:
George P. Young, the patients’ lawyer, said the inability of people like his clients to recover damages under federal law had necessitated the state’s action. “What Texas has done is to fill a vacuum and say we are going to set out a professional medical standard of care when H.M.O.’s make medical necessity decisions,” Mr. Young told the court. He said that under the companies’ position “they would be free to say we’re going to use the medical-necessity standard of a witch doctor or whatever we decide it is.”Both Justice Antonin Scalia and Chief Justice William H. Rehnquist indicated that they saw the dispute as one over the value of benefits rather than quality of care. “To say that the plan condemned them to not using Vioxx is simply not true,” Justice Scalia told Mr. Young. “All you’re talking about here is money. The claimant didn’t want to lay out the additional money for the Vioxx.”
CNN: “Justices appear split on HMO issue“:
In arguments Tuesday, the justices wrestled with conflicting definitions of care and coverage. “To make a coverage decision, doesn’t one have to make a medical judgment?” asked Justice John Paul Stevens. Justice Sandra Day O’Connor seemed to agree. “If you’re [insurance companies] telling doctors what’s medically necessary, then aren’t you defining necessities of medical care?”
The Washington Post: “Justices Seem Unlikely To Allow Suing Insurers“:
But Chief Justice William H. Rehnquist, echoing a point made earlier by health insurance company lawyer Miguel A. Estrada, replied that HMOs and other managed-care firms do not decide on treatment. “Their statement is they just won’t pay for it,” he said.Mattax countered that a payment decision, based in part on a judgment about what the necessary and appropriate treatment would be, “is still a medical judgment.”
But Justice Stephen G. Breyer, while expressing sympathy for patients who are denied benefits, said that state lawsuits “seem to be the thing this [federal] statute forbids, and I don’t see a way around it.”
The Boston Globe: “Justices seem to back HMOs on a patient-rights question.“:
All but a few of the nine justices voiced negative reactions to a Texas law that allows patients to seek damages when an HMO denies coverage for treatment it says is not needed — despite a doctor’s recommendation. Texas is one of 10 states with such laws.
You can access many of the briefs filed in the combined cases at this link and this link.