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Case could put HMOs in the emergency room

The Supreme Court considers whether an HMO can be sued over paying doctor a bonus for cost-cutting

February 23, 2000
Web posted at: 9:04 p.m. EST (0204 GMT)

By Jessica Reaves

The general public has spent the last 10 years dealing with HMOs -- and now it's time to drag the members of the Supreme Court into the fun. For the first time, the Court will consider a case that addresses one of the most combustible aspects of the health care debate: Should patients be allowed to sue health maintenance organizations when they believe they have been denied treatment because a doctor had a financial incentive to do so?

Cynthia Herdrich says yes -- she is the patient described in the previous scenario. After a doctor informed her that she would have to wait eight days to have tests on her excruciatingly painful stomach, Herdrich's appendix burst, sending her into emergency surgery. Her lawyer, James Ginzkey, claims her life was put at risk because her doctor was keeping an eye on the bottom line -- and a possible bonus -- rather than on Herdrich's health. Ginzkey told the court that there was a place for cost-cutting measures and even financial incentives, but that patients should be allowed to sue an HMO if they believe their well-being has been compromised. Lawyers for Herdrich's HMO say that Congress has legislated against such suits, arguing that the incentives are designed to keep overall costs down, so that as many patients as possible may be seen and treated.

Experts on both sides of this case are keeping a sharp eye trained on the Justices, as their judgment could have sweeping ramifications for the health care industry. Some speculate the Court will keep a relatively hands-off approach, leaving the bulk of the decision-making to Congress. On the other hand, it could instigate an aggressive investigation into the constitutionality of legislation that largely protects HMOs from being sued for denial of service. A defense lawyer may have inadvertently hit the nail on the head when he said, "It is no exaggeration to suggest that the future of medical care in its delivery and its regulations are implicated by this case. If my client's setup violates [federal law] then all managed care does as well."

Copyright © 2000 Time Inc.