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Health Insurance & Affordable Care Act

Supreme Court Ruling Narrows Suits Against HMOs

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Her group had urged the court to take the case in an effort to resolve the question that goes to the core of how health plans do business.

"It is our hope that the trial bar will heed the message ... and recognize that consumers are ill-served by expensive litigation that would drive up coverage costs and dramatically increase the number of uninsured Americans," said Chip Kahn, president of the Health Insurance Association of America.

Donald Palmisano, MD, an American Medical Association trustee, said he was happy that the court's decision apparently means physicians won't be held liable under the ERISA statute unless they are running the HMOs. The AMA had filed a brief with the court arguing that the particular incentive scheme used by a health plan is less important than how well a doctor takes care of the patient.

But Palmisano says the ruling points up the need for Congress to pass a "patients' bill of rights," which includes the right to sue your plan. "We're saying that a federal law [is needed] that allows HMOs to be held accountable when they interfere with the patient-physician relationship," Palmisano tells WebMD.

Monday's ruling is limited in that it applies only to those times when a doctor is making a decision both on treatment and eligibility, says Peter Budetti, MD, director of the Institute for Health Services Research and Policy Studies at Northwestern University.

Gregg Bloche, MD, a co-director of the Georgetown/Johns Hopkins program on law and public policy, backed Herdrich's case, but he says he still believes the industry may come up a loser at the end of the day. He says non-ERISA suits involving issues of whether a health plan denied a treatment that a doctor wanted for a patient could fit under the Herdrich ruling.

"The industry may be better protected from the class-action sharks but not from the malpractice minnows in state court," Bloche tells WebMD.

Like Cynthia Herdrich, Jan Greene, a 39-year-old freelance writer from San Francisco, had a bad experience with an HMO. And she has some advice -- short of a lawsuit -- for those who find themselves in the same boat.

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