Patients can’t seek large damage awards in court if their HMOs refuse to pay for doctor-recommended medical care, the U.S. Supreme Court ruled, rejecting arguments that the threat of multimillion-dollar lawsuits keeps insurance companies honest.
The unanimous decision, in a case on a Texas law, invalidated an important part of patient rights laws in several states and tossed a political hot potato back to Congress. Lawmakers have tried repeatedly and failed to pass national patient protections.
Relying on a federal pension benefit law known as ERISA, the court said patients may pursue claims only in federal courts. There, awards are capped at only the cost of medical services the HMO would not cover.
The ruling affects the roughly 72 million people covered by HMOs. At least nine other states have laws similar to the Texas statute: Arizona, California, Georgia, Louisiana, Maine, New Jersey, Oklahoma, Washington and West Virginia.
The cases are Aetna Health Inc. v. Davila, 02-1845 and Cigna Healthcare of Texas Inc. v. Calad, 03-83.
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