Federal court upholds malpractice law

A federal judge has upheld an unprecendented Texas law that allows patients to sue their health plans for malpractice. The law means that consumers in Texas can sue to collect damages in state court against health insurers and employer health plans that deny them medical treatment.

A state law called the Health Care Liability Act holds that HMOs could be liable for damages caused by their "failure to exercise ordinary care when making a health-care treatment decision."

Aetna US Healthcare immediately filed suit last September challenging the law after it was enacted, arguing that it improperly sought to circumvent the Employee Retirement Income Security Act (ERISA), which prevents nearly 125 million Americans from collecting damages for denial of medical treatment that results in death, injury, or economic loss.

The Fort Worth Start-Telegram reported that Aetna is working with state officials about how to alter the independent medical review process (which asks an outside party to review a carrier’s decision regarding coverage) required by law to avoid conflict with federal law. One suggestion has been to make the review process nonbinding.

As part of the federal court ruling, the judge ruled that ERISA pre-empts the review process for most members of health insurance companies in Texas. However, the judge did not order the state to stop its independent review process.

Since the process began last November, 253 cases have been reviewed. Of the 244 reviews that have been completed, 114 rulings were in favor of the HMO in question and 110 in favor of the patient.