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May 29, 2000 -- It was July 6, 1998, and Joseph Plocica was in a pink-walled psychiatric ward in Fort Worth, Texas, under suicide watch. The nurses, who checked on the 68-year-old retired pharmacist every 15 minutes, had taken away his shoe laces, razor blades, and anything else he might use to kill himself.
That same day, about 45 miles away in Dallas, an administrator for Plocica's managed care plan was considering the pleas of his psychiatrist, Harold Eudaly, MD, for more hospital time for his patient. But despite his suicide attempts and over his doctor's objections, Plocica was discharged when the administrator determined he had used up his allotted days under the plan's protocols. That night, after his wife fell asleep, Joseph Plocica went to his garage and drank a half-gallon of antifreeze. After nine days in a coma, he died.
A Landmark Suit
Plocica's family sued his health maintenance organization, NYLCare, for malpractice in 1997, and two months later the state of Texas followed that opening shot with a sweeping lawsuit brought by then-Attorney General Dan Morales (Dem.) against six Texas health maintenance organizations (HMOs). The suit accused the HMOs of illegally offering financial incentives that encourage physicians to limit medical care to patients.
Last month, a landmark settlement was reached, the first step toward justice for Joseph Plocica and others harmed by a system in which doctors were rewarded for restricting care. But while some experts applaud the agreement between Texas and Aetna U.S. Healthcare, which owned NYLCare when Plocica died, others say it doesn't go far enough.
The Texas pact with Aetna gives doctors the authority to decide what is "medically necessary" for patients. The insurer also created an ombudsman's office to listen to complaints and help patients navigate complicated issues. The changes are expected to improve patients' access to specialists.
"The bottom line is this settlement places medical decision-making in the hands of doctors and their patients, and Texans can rest assured that doctors won't be penalized for elevating patient needs above those of HMOs," says current Texas Attorney General John Cornyn (Rep.).
But the man who brought the lawsuit, former Attorney General Dan Morales, says the settlement strongly favors the insurance industry. If this settlement becomes a model for other states as expected, Morales says, patients lose.
"I think this settlement represents a very positive development for the insurance industry and is a good thing for HMOs and their shareholders and executives," says Morales, who had sought to fine Aetna $10,000 per violation. "I don't think it's good for patients or consumers."
Indeed, Aetna admits no fault and pays no fines in this settlement. Morales, for one, doubts it will have much impact beyond Texas' borders. "If your objective is to bring meaningful change to an industry, you cannot do it by saying please," he says. "You cannot allow them to just break the law repeatedly and then, for a penalty, make them promise not to do it anymore."
Morales' 1998 suit contended, among other things, that the HMOs were illegally restricting physician budgets for certain services, such as hospital admissions and specialist referrals. Doctors who stayed within set budgets received a percentage of the surplus as a bonus. If they exceeded the budget, they were required to return some or all of the costs, considered a fine.
The Cornyn settlement with Aetna prohibits the firm from fining doctors who exceed set medical budgets, and they cannot give bonuses to doctors who stay within limits.
The settlement is expected to be a model for the state as it settles with other firms sued by Morales, including Humana Health Plans of Texas, PacifiCare of Texas, NYLCare Health Plans of the Southwest, and NYLCare Health Plans of the Gulf Coast.
Some experts also believe those companies will craft plans in other states modeled after the Texas agreement, and that components of the plan will even prove popular with consumers and employers considering new health plans for employees.
Was Cornyn Snookered?
"This was a great public relations fix," said Paul Risner, a health care attorney at Baker, Donelson, Bearman, & Caldwell, of Nashville, Tenn. "It is a restatement of what managed care has been doing already in many jurisdictions."
Richard F. Scruggs, a plaintiffs' lawyer in Pascagoula, Miss., who was instrumental in the tobacco settlements and is now involved in lawsuits against Aetna and other insurers, called the Texas agreement a "sweetheart deal" and said Attorney General John Cornyn was either "snookered or motivated by politics."
He cautions other states against signing up for the agreement without reading the fine print. "It is chock-full of loopholes, imprecise wording, and contradictory language that give Aetna plenty of wiggle room to avoid the changes that are really necessary to put patient care before market share," Scruggs said.
But others, such as former U.S. Attorney General and Pennsylvania Governor Richard Thornburgh (Dem.) herald the Texas agreement as "demonstrating for us all the proper method of health care reform," by action of the states rather than by means of "the not-so-tender mercies of the class-action plaintiffs' bar." "The Texas agreement -- seeks to enhance quality health care and -- it does so without causing the kind of economic damage that is part and parcel of a litigation explosion," Thornburgh wrote in The Los Angeles Times.
And for Joseph Plocica, the agreement would have made all the difference: NYLCare would have been required to heed his doctor's pleas and extend his care.
"The real impact of that settlement won't be known until we see how vigorously it is enforced," said George Parker Young, a Fort Worth lawyer representing Plocica's family. "If Aetna is held to the agreement, then it could be very good for patients."
Michael D. Towle is based in Chantilly, Va., and writes regularly on health and legal issues for WebMD.
WebMD does not provide medical advice, diagnosis or treatment. See additional information.
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