HOUSTON-A federal district judge has ruled Texans can sue health plans for substandard care but they can’t seek damages for denial of benefits.
Judge Vanessa Gilmore ruled that federal ERISA statutes hold sway on health-plan coverage decisions. Specifically, she struck down provisions of a Texas law that had given patients the right to appeal denials to an independent panel. But she said states can do as they please in holding health plans accountable for substandard care.
The decision came in response to a suit by Aetna claiming that the state’s 1997 Health Care Liability Act-the nation’s first specifically allowing quality-of-care suits against health plans-conflicted with ERISA.
In her decision, Judge Gilmore agreed that ERISA prevents states from meddling in employers’ ability to decide what benefits they will provide. The ruling pleased Texas health plans, which had feared the law would have a chilling effect on denials. The decision assures that patients alleging harm from a denial will go to federal court, where ERISA prohibits damage awards.
But the Texas Medical Association and Elton Bomer, the state insurance commissioner, said consumers would be badly hurt by the loss of independent review of coverage decisions.
Although it’s only a district court decision, the ruling offers the clearest indication yet as to what states may do in health-care liability without running afoul of ERISA, said Anthony Knettel of the ERISA Industry Committee, which represents large employers. He predicted many of the dozens of states considering Texas-style liability laws will now move forward.
Knettel notes that changes in ERISA proposed by the Department of Labor would require employer-sponsored health plans to follow a detailed appeals process. -Jon Hamilton
HOUSTON-A federal district judge has ruled Texans can sue health plans for substandard care but they can’t seek damages for denial of benefits.
