Newspaper article THE JOURNAL RECORD

Judges Deplore Law That Shields HMOs

Newspaper article THE JOURNAL RECORD

Judges Deplore Law That Shields HMOs

Article excerpt

WASHINGTON -- Federal judges around the United States, frustrated by cases in which patients who are denied medical benefits have no right to sue, are urging Congress to consider changes in a 1974 law that protects insurance companies and health-maintenance organizations against legal attacks.

In their decisions, the judges do not offer detailed solutions of the type being pushed in Congress by Democrats and some Republicans. But they say their hands are tied by the 1974 law, the Employee Retirement Income Security Act. And they often lament the results, saying that the law has not kept pace with changes in health care and the workplace.

The law, known as ERISA, was adopted mainly because of congressional concern that corrupt, incompetent pension managers were looting or squandering the money entrusted to them.

The law, which also governs health plans covering 125 million Americans, sets stringent standards of conduct for the people who run such plans, but severely limits the remedies available to workers. The law does not allow damages for the improper denial or processing of claims, which the courts have interpreted as protecting HMOs even if they improperly deny care to a member.

In a lawsuit challenging the denial of benefits, a person in an employer-sponsored health plan may recover the benefits in question and can get an injunction clarifying the right to future benefits. But judges have repeatedly held that the law does not allow compensation for lost wages, death or disability, pain and suffering, emotional distress or other harm that a patient suffers as a result of the improper denial of care.

The 5th U.S. Circuit Court of Appeals, in New Orleans, reached a typical conclusion in a lawsuit by a Louisiana woman whose fetus died after an insurance company refused to approve her hospitalization for a high-risk pregnancy. The woman, Florence B. Corcoran, and her husband sought damages under state law.

In dismissing the suit, the court said, "The Corcorans have no remedy, state or federal, for what may have been a serious mistake."

The court said that the harsh result "would seem to warrant a re- evaluation of ERISA so that it can continue to serve its noble purpose of safeguarding the interests of employees."

Democrats and some Republicans in Congress are pushing legislation that would make it easier for patients to sue HMOs and insurance companies. …

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