Supreme Court Watch
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RAY SUAREZ: Two unanimous opinions today. In one, the court said patients cannot sue their HMO’s under a specific federal law. In the other, the Justices made it easier for older workers to claim they were victims of employment discrimination. For more on these cases we turn to NewsHour regular Jan Crawford Greenburg, national legal affairs correspondent for the Chicago Tribune. Well, Jan, the HMO case starts with an appendicitis attack in Illinois. What was Cynthia Hedrick looking for and did she get it?
JAN CRAWFORD GREENBURG: She claimed the very structure of HMO’s resulted in her being denied treatment, in a sense. She went to her doctor to get medical attention because she had had some pain in her abdomen. The doctor scheduled an ultrasound eight days later at a hospital outside of the area that was affiliated with the HMO that the woman was involved in.
But during that time while she was waiting, her appendix ruptured. So she argued that she was denied this treatment, that this treatment was delayed because of the way the HMO was set up. The HMO, she said, offered doctors incentives to deny treatment, delay treatment, or in her case to offer it at facilities that were affiliated with the HMO.
RAY SUAREZ: So what did the Justices say in return, in response?
JAN CRAWFORD GREENBURG: Well, she won in the federal appeals court. But the court today said that the federal appeals court was wrong, that to allow these kind of claims, as Justice David Shouter said in his unanimous opinion, that to allow this kind of claim, a broad attack on HMO’s and the structure of HMO’s, would essentially lead to the end of managed care as we know it.
RAY SUAREZ: Now, this case had already been tried as a malpractice case in a state court. Was shutting this door something the Justices did very self consciously and with attention to this?
JAN CRAWFORD GREENBURG: That’s right. That’s a good point. She sued her doctor formal practice, and won $35,000 in the state courts. She added this other claim to also, to make her HMO pay as well. And in the ruling today, the court acknowledges that some states do allow malpractice claims in certain circumstances. But they pointed to the law that she relied on which was a federal employee benefits law, that was designed to cover pension plans and to prevent abuses of employees benefits and said that Congress surely never intended for that law to apply so broadly and to be used here to prevent the kind of structure that HMO’s have now, in which all HMO’s offer these kind of incentives to keep costs down. As Justice Shouter said, that’s the very point of HMO’s.
RAY SUAREZ: So by ruling unanimously, does this fall into a pattern of rulings in this term and recent terms that sort of restrain federal power and how far the writ of federal law runs?
JAN CRAWFORD GREENBURG: You know, I don’t really think this case applies in that way. And there’s a lot of discussion in the opinion about what Congress intended and how broadly this law sudden be applied.
And Justice Shouter makes clear that this is really a matter for Congress, and not the federal courts to try and apply this benefits law in this situation, attacking the structure of HMO’s, even though the woman had argued that the way that HMO’s are set up is really a conflict of interest because the HMO has a duty under this federal law to put patients’ interests first. But the court said that Congress never intended for those arguments to be made in this circumstance, because of the consequences, because all HMO’s are designed to keep costs down.
And this was really the first kind of managed care case to reach the Supreme Court. So there was an extraordinary amount of interest in it from groups all over the place. And in the opinion the court actually traces the evolution of medical care and managed care in the United States.
It talks about how we’ve evolved from a traditional fee for service plan, where doctors were paid for the services they provided, and how that plan may have encouraged too many services and encouraged an incentive to provide unnecessary medical care. And in response to that, the HMO system developed to encourage doctors to provide lesser services, keep costs down, perhaps make medical care more affordable.
RAY SUAREZ: Now, when people hear that phrase, sue your HMO, they probably think immediately of the debates that Congress has been having recently. Does this opinion restrain what Congress can do?
JAN CRAWFORD GREENBURG: Not — no. That’s an interesting point, because as you know the court has walked into a number of controversial issues this term that have torn state legislatures, have torn Congress.
This is one of them. Congress is divided right now over a patients’ bill of rights, one of the provisions would expand patients ability to sue HMO’s, and today in the wake of the ruling people on both sides said this shows what Congress should do next. That lawyers for the Managed Care Association said that the court’s ruling today should be a signal to Congress not to unravel the structure of HMO’s and expand people’s ability to sue HMO’s.
People on the other side said, look, this ruling shows that we need Congress to step in and protect patients’ rights. Now, you mentioned this earlier and I just want to make clear, this doesn’t mean that HMO’s get off in every case, of course. And like I said, the ruling acknowledges that some states have allowed malpractice claims against doctors, against HMO’s. One law professor I talked to today said that he believed that some of that language in the opinion would encourage more malpractice actions in some of the state courts against HMO’s.
So it could have that intended effect. There’s another round of assaults on the managed care industry, in what we call class action lawsuits, those big lawsuits that are targeted at specific industries. One lawyer I spoke with today said, who has filed one of those lawsuits, said he doesn’t think it’s necessarily the end of those lawsuits, because those are designed to make the industry disclose that they’re offering these kinds of incentives to keep costs low.
RAY SUAREZ: Let’s take a quick look at the age discrimination suit. Does it get easier now to sue your boss if you think you’ve been discriminated against?
JAN CRAWFORD GREENBURG: That’s what most people agree today. The A ARP was just thrilled by this ruling, they said if the court had adopted the reasoning of the appeals court below, it would have made it almost impossible for workers to recover, because they would have required employees to offer extraordinary, or much clearer and direct evidence of age discrimination, almost a smoking gun. But today the court in a ruling like you said, that employees groups were heartened by, said that if you can show that you’ve got this case of age discrimination and that the employer’s reasons why they fired you were untrue, then that’s good enough, you don’t always have to go to the next step and say, age was the major reason for firing you.
RAY SUAREZ: The plaintiff in this case won down at the local level; a jury agreed with him. It was reversed on appeal.
JAN CRAWFORD GREENBURG: Right.
RAY SUAREZ: Does this decision give some power back to juries in these kinds of cases?
JAN CRAWFORD GREENBURG: I think a lot of trial lawyers would say yes it does, at least that’s the argument they’re going to make, and they made that argument to the Supreme Court — because the evidence that he presented, of course the jury thought was good enough to prove an age discrimination case. He was fired after 40 years at this company, he was replaced by younger workers.
He said that one of his supervisors told him he was old enough to have come over on the Mayflower. And the employer, he said, didn’t offer any good reasons or explanations why. He thought that should be good enough. An appeals court said he needed more direct evidence. Today the Supreme Court’s ruling, many lawyers I talked to today, instead gives more weight to that jury decision in other cases too.
RAY SUAREZ: We’re pretty close to the end of the early, right?
JAN CRAWFORD GREENBURG: A couple more weeks of a lot of controversial and high profile cases. Of course these were two very closely watched ones.
RAY SUAREZ: Jan Crawford Greenburg, thanks a lot.
JAN CRAWFORD GREENBURG: Thanks.