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HMOs and Punitive Awards
Bob Gard wrote: "It's no mystery why the trial lawyers give mostly to
the Democrats. The Republicans have been trying to put ceilings on punitive
damages, most notably recently in medical malpractice. The Democrats hold the
line in favor of the trial lawyers". Randy Black counters "I note
that the Supreme Court Justices, all of them, Democrats and Republicans, voted
to limit lawsuits in STATE courts, ONLY, against HMOs, on the pretext that state
courts juries are more likely to award huge, undeserved punitive awards".
RH: There is something wrong when Supreme Court Justices are labeled "Democrat"
or "Republican", but that is the way things have evolved.
We posted a piece by Randy Black on damage suits against HMOs. Professor Hank
Greely of Stanford Law School comments: "The case to which Randy Black
refers, Aetna v. Davila, was just decided by the Supreme Court. It is more complicated
than he presents it - not surprisingly, as it deals with one of the most complicated
and confusing areas of the law I know. The issue involves whether a federal
law, called ERISA (Employee Retirement Income Security Act of 1974), preempts
(and thus prevents) state lawsuits against employee health plans. The Court
has struggled with this issue for 20 years and just held that a state law (from
Texas, passed under but not signed by Governor Bush) that made an HMO liable
for its negligent coverage decisions did not apply when the patient was getting
coverage through an ERISA-covered employee plan. The size of the awards wasn't
discussed with reference to state courts versus federal courts, but the majority
did note that holding the Texas law preempted would greatly cut damages against
such HMOs, as the federal lawsuit patients might have includes only "contract-like"
damages - not damages for personal injury from the bad decision.
It wasn't an unreasonable decision given the precedents in the area; it would be nice if Congress would rewrite the law or the Court would scrap its precedents so that injured parties could get some remedy for what are sometimes horrendous and horrendously expensive injuries, but I'm not holding my breath.
As to punitive damages, there have been efforts recently to limit them, both legislatively and, in some states, by court decision. These are very uncommon in medical malpractice cases but more common, though still unusual, in product liability cases".
Daryl DeBell asks a simple but important question. "Perhaps someone can tell me why HMOs are not prosecuted for practicing medicine when they negate a medical doctor's decision and order, obviously to save money". RH: I suppose it is legal if the HMO official making the decision is an MD.
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