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NEW YORK -- More states will likely enact laws allowing patients to sue health maintenance organizations for malpractice, even though opponents of the laws say those measures are detrimental to managed care.
Missouri and Texas have passed laws permitting plan participants to sue their plans for medical malpractice, said Patricia Butler, a health care policy analyst and author of a study on the two laws. Bills are pending in other states, including New York, that would allow such suits.
Ms. Butler participated in a panel last week in New York at a briefing sponsored by the Henry J. Kaiser Family Foundation and the National Press Foundation.
The laws are meant to make plans accountable to enrollees for their actions, she said. Litigation is seen as a way to resolve grievances and deter plan conduct that will result in awards against them.
Despite similar proposals in other states failing to become law in 1997, "it's pretty likely we will see this kind of activity next year," she said.
Three barriers exist to individual suits against health care plans, and any law has to address them before suits can commence, Ms. Butler said.
First is the prohibition in most states against the corporate practice of medicine. Courts in Texas and Missouri previously had ruled that individuals cannot sue HMOs for malpractice because as corporations, the organizations cannot be practicing medicine. The laws in both states have repealed that doctrine.
The second barrier is the lack of legal grounds for suing a health plan for malpractice. The Texas Legislature swept away this barrier in the statute by explicitly permitting such suits. The Texas law does not apply, however, to self-insured employers.
The third barrier is the pre-emption provision of the federal Employee Retirement Income Security Act. This works to a plan's advantage, as ERISA does not permit awards for pain and suffering or punitive damages.
The Texas law, which took effect Sept. 1, is being challenged, however. Aetna Health Plans of Texas Inc. filed a suit to block its implementation, asserting ERISA pre-empts it (BI, June 30). Despite the suit, the law is still alive, though no suits against health plans have yet been filed, she said.
The court's ruling "will certainly signal what other states will do" in upcoming years with their attempts to pass their own laws, Ms. Butler said.
In the end, the impact of the Texas law and any other states' laws remains unclear "as long as ERISA is in the picture," she said.
John Bracken, a partner with the Islandia, N.Y., law firm of Bracken & Margolin, supports the laws, including the bill pending in New York.
The law is needed because consumers think they lack a remedy when HMOs make unfavorable decisions on medical coverage. The law will change HMO behavior by putting the patients' interests first, he added.
Lisa McGiffert, senior policy analyst for Consumers Union in Austin, Texas, said the laws are needed to keep health plans accountable.
But an opponent of the laws warned they could end managed care. Maxine Fass, senior vp and general counsel for Health Insurance Plan of Greater New York, said the essence of managed care is the ability to control medical treatment. If the plan's decision to limit care can be successfully challenged, managed care would be destroyed, she explained.
Another opponent said the laws would not improve care. Because of the laws, plans will focus on limiting liability instead of care quality, said G. Lawrence Atkins, president of Health Policy Analysts in Washington, a group that worked with employers in opposing the Texas bill.
Mr. Atkins said the laws have two main problems. Because a suit can take years to resolve, it can't help the patients receive the care they need. And at a trial, a jury would eventually decide what treatments the plan should cover, not what treatments the plan agreed to cover or those medically necessary, he said.