Judge: ERISA Does Not Prevent Participant's Medical Malpractice Claim

August 1, 2003 (PLANSPONSOR.com) - ERISA does not completely preempt a participant's state law medical malpractice claim involving mixed eligibility and treatment decisions.

>The US 11th Circuit Court of Appeals turned to the US Supreme Court’s decision in Pegram v. Herdrichin reversing a lower federal court’s decision.   The 11th Circuit found that mixed eligibility and treatment decisions made by HMOs are not subject to ERISA’s fiduciary standards, according to Washington-based legal publisher BNA.

Also, even though the Supreme Court case does not answer ERISA preemption questions, the appeals court read the ruling in that case to indicate state law medical malpractice claims that challenge an HMO’s mixed eligibility and treatment decisions are not barred by ERISA.   “Although Pegram is not dispositive because the issue of preemption was not before the Court, we find compelling persuasive force in the Court’s unanimous ruling and believe that it provides us with guidance in determining the true nature of (the plaintiff’s) claims,” Circuit Judge Charles Wilson said in writing for the appeals court.

>The court went on to find that claims based on mixed eligibility and treatment decisions are not claims “to recover benefits” under ERISA Section 502(a)(1)(B). In so ruling, the appeals court noted that the Supreme Court’s decision “expressed strong doubt that Congress intended to federalize and preempt state law malpractice claims by converting them to fiduciary claims” under ERISA Section 502(a)(2).   In this case then, the plaintiff’s claim could not be characterized as a contract claim. Instead the claim should be treated as a tort claim not governed by Section 502(a)(1)(B), the court decided.

Cat Scratch Fever

>Robbie Lee Land sought medical treatment from his employer-sponsored HMO – administered by CIGNA Healthcare of Florida – after being bitten on the hand by his cat. An emergency room physician diagnosed Land with a cellulitis infection and ordered that Land receive an injection of antibiotics.

>The following day, the physician observed Land’s hand had not improved and in conjunction with the primary care physician, the physician determined that Land was suffering from a more serious infection. The physicians ordered that Land be admitted to the hospital immediately for aggressive intravenous antibiotic treatment.

>Shortly after Land was admitted to the hospital, a CIGNA approval nurse reviewed the proposed plan for treatment of Land’s hand. The nurse approved the use of intravenous antibiotic therapy, but determined that the infection was localized and that Land should receive outpatient care.

>However, a week later, Land’s took a turn for the worse leading to an amputation of his middle finger. Land then sued CIGNA in a Florida state court, alleging that CIGNA was negligent in the care and treatment of his infection. CIGNA removed the case to federal court as being preempted by ERISA.

>A judge in the US District Court for the Middle District of Florida denied Land’s attempt to remand the case back to state court. The district court judge instead granted CIGNA’s motion to dismiss the lawsuit after finding that Land’s medical malpractice claims were preempted by ERISA.

The case isLand v. CIGNA Healthcare of Florida,11th Cir., No. 02-15549, 7/30/03.