On September 17, a panel of the 5th U.S. Circuit Court of Appeals upheld a decision by U.S. District Judge Sidney Fitzwater of Dallas that the Employee Retirement Income Security Act of 1974 (ERISA) pre-empted a patient suit, according to the Texas Lawyer.  

That suit was filed on behalf of a woman whose left leg had to be amputated because her HMO allegedly delayed and denied special treatments ordered by her doctor after she underwent skin graft operations and surgeries to create flaps over wounds caused by a spider, according to the report.

Gwen Roark died in November 2001 from injuries that were the basis of her suit, says George Parker Young, who represents Roark’s husband, Robert, and her estate.

Clean Slate

Judge Jerry Smith, writing for the panel in Roark v. Humana Inc., said the Roarks would have a strong case against ERISA pre-emption if the panel was “writing on a clean slate” or the 5th Circuit was deciding the case en banc in light of US Supreme Court decisions in recent years. However, Smith, who was joined in the opinion by Judges Fortunato Benavides and Robert M. Parker, said the panel was bound by the 1992 decision of a separate panel in Corcoran v. United Healthcare Inc.

George Parker Young, who is representing Roark’s husband Robert and her estate in the suit, says he will file for en banc consideration of Roark by the 5th Circuit.

In the suit, Robert Roark alleges violations under the Texas Health Care Liability Act, passed by the state Legislature in 1997. The THCLA was the first statute in any state that allows patients to sue HMOs for liability in medical-malpractice cases.

Previous Findings

In the Corcoran case, the Fifth Circuit held that an HMO makes benefit determinations as part of its mandate to decide what benefits are available under the ERISA plan. Such so-called “mixed” eligibility determinations are pre-empted by ERISA, according to the court.   However, it acknowledged in the opinion that its ruling would leave some patients with no remedy for potentially serious mistakes.

In 1995, the US Supreme Court said in New York State Conference of Blue Cross and Blue Shield v. Travelers Insurance that a state statute’s indirect economic influence doesn’t bind HMO plan administrators to any particular choice and doesn’t run afoul of ERISA pre-emption. In 1997’s California Division of Labor Standards Enforcement v. Dillingham Construction, the high court held that a state law addressing wages in apprenticeship programs in state-approved and nonstate-approved programs was indifferent to ERISA coverage (see  Letter of the Law: Dillingham decision moderates ERISA’s sway over state law ).

More recently, the US Supreme Court, in a divided five to four vote in Rush Prudential HMO v. Moran, rejected the notion that ERISA preempts independent review of a health maintenance organization’s decision that denies health coverage (see  US High Court Green Lights State HMO Review ). Such reviews are now in effect in about 40 states.