ASHINGTON,
March 23 — With the debate over patients' rights stalled in Congress, the
issue moved to the Supreme Court on Tuesday in an argument about whether
patients can invoke state law to sue managed-care companies for medical
malpractice when treatment recommended by their doctor is withheld.
The federal law that governs the health insurance that millions of people
receive through their workplace does not authorize such lawsuits. The
question for the court is whether that law, the Employee Retirement Income
Security Act of 1974, or Erisa, pre-empts the growing number of state laws
that do.
The ability of patients to sue health maintenance organizations for
damages for the denial of needed care is one of the most contentious issues
in the health care debate, and this case has drawn intense interest from the
industry and consumers alike.
Two managed-care companies, Aetna Health Inc. and Cigna HealthCare of
Texas, are appealing a federal appellate decision that permitted patients'
lawsuits to proceed under the Texas Healthcare Liability Act.
President Bush was
governor of Texas when the measure became law in 1997, without his
signature, and he embraced the law during his last presidential campaign.
Now, however, the Bush administration is supporting the managed-care
companies in arguing that the Texas law and others like it are invalid. Nine
other states — Arizona, California, Georgia, Maine, New Jersey, North
Carolina, Oklahoma, Washington and West Virginia — have enacted similar
laws. These laws threaten to upset the "very careful balance" that Congress
struck in the federal law, James A. Feldman, an assistant solicitor general,
told the court.
Making a point also emphasized by the companies' lawyer, Miguel A.
Estrada, Mr. Feldman said Congress intended to encourage the formation of
managed-care plans by providing a system of limited liability.
"To allow states to essentially say, as the state has said here, `Well,
we're going to provide an additional remedy that Congress rejected when it
drew that careful balance' would be to completely undermine Congress's
decisions about how this system should be structured," Mr. Feldman said.
Under Erisa, patients can sue for the dollar value of services found to
have been improperly denied, but not for damages resulting from the denial.
The Texas law, by contrast, makes managed-care plans "liable for damages for
harm" caused by a failure to "exercise ordinary care when making health care
treatment decisions." The United States Court of Appeals for the Fifth
Circuit, in New Orleans, upheld the state law on the ground that it did not
duplicate the remedy provided by Erisa.
Juan Davila, one of the two patients whose suits led to the Supreme Court
case, was prescribed Vioxx by his doctor for arthritis but was required
under his Aetna health plan to try two less expensive medications first. One
of those drugs caused severe gastrointestinal bleeding that sent him to the
emergency room.
The other patient, Ruby Calad, was hospitalized for a hysterectomy and
other abdominal surgery under a Cigna HealthCare plan that authorized a
one-day stay for those procedures. Though her surgeon recommended a longer
stay, Cigna's hospital-discharge nurse refused to authorize it. Ms. Calad
suffered complications at home and had to make an emergency return to the
hospital several days later. The two cases, consolidated for the argument,
are Aetna Health Inc. v. Davila, No. 02-1845, and Cigna HealthCare of Texas
v. Calad, No. 03-83.
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."
Mr. Young replied: "Well, the truth is, Your Honor, that neither of these
claimants would have needed health insurance if they had the independent
means to just whip out a gold card and pay for the drug."
David C. Mattax, an assistant attorney general from Texas, defended his
state's law by emphasizing that it did not impose liability on the patient's
employer, but rather for the negligent exercise of medical judgment by the
managed-care company. "We will regulate that as a separate duty, separate
and apart from Erisa," Mr. Mattax said.
Separately on Tuesday, the court ruled unanimously in a Clean Water Act
case from the Florida Everglades that a pumping station that conveys
pollution from one body of water to another remains subject to the law's
requirement for a permit, even if the pump is not itself the source of the
pollution.
But the court sidestepped the most provocative assertion in the case, put
forward by the Bush administration: that no permit is required in that
circumstance because all the country's navigable waters are "unitary." Since
the law requires a permit for the "addition" of pollution to the water,
pollution that is simply moved within the "unitary" water system cannot be
said to be added, the administration argued.
Writing for the court today in South Florida Water Management District v.
Miccosukee Tribe, No. 02-626, Justice Sandra Day O'Connor said this new
argument needed to be presented first to the lower courts, where the case
now returns.