Steven Chabre, a plaintiff’s ERISA lawyer out of the San Francisco Bay area, raised the following scenario in an e-mail the other day. Patient has a serious vascular disorder of the cervical spine. He has health insurance through an HMO. Benefits are provided exclusively through in-network doctors unless care is available only from out of network providers. The patient’s in-network doc recommends treatment from renowned out of network specialist. The HMO denies the request. Patient appeals the denial and eventually it is overturned. In the meantime, patient’s conditions has worsened and he’s now paralyzed. What compensation is available under this situation?
If the patient’s health insurance is provided through an ERISA plan, the patient has no ability to get any compensation beyond medical expenses actually incurred in this situation. It is similar to the case I had several years ago involving Don and Cindy DeCastro and blogged about here.
This injustice results from the broad application of ERISA’s preemption doctrine from federal courts over the last two decades. One of the best discussions of how this doctrine has developed and the problems it causes is in DiFelice v. Aetna U.S. Healthcare, 346 F.3d 442 (3rd Cir. 2003) which you can also find in the library of this website here. Judge Edward Becker, a legendary jurist who passed away recently, spends several pages, beginning on page 19, outlining the history of how ERISA acts to preempt many state law remedies when an insurer’s or other payer’s wrongful acts cause injury to their insureds.
As Judge Becker points out, the result of ERISA’s “unjust and increasingly tangled” remedial scheme is to insulate insurers, HMOs and other ERISA fiduciaries from any meaningful consequences for behavior that favors their own economic interests at the expense of the consumer. Judge Ambro adds his voice to Judge Becker, both judges pleading that Congress or the Supreme Court do more to protect ERISA plan participants and beneficiaries.