High Court Says ERISA Preempts State Lawsuits

In a unanimous decision, the U.S. Supreme Court ruled on Monday that patients cannot sue their health maintenance organization under state law for refusing to pay for medical treatment recommended under a doctor’s care.

The decision ruled that a 1974 federal law, the Employee Retirement Income Security Act, completely pre-empted such lawsuits brought in state court by patients who seek damages from their HMOs over the denial of medical care, according to Reuter’s.

The court ruling involved a law in Texas that allowed patients to sue HMOs over their medical treatment. The cases are Aetna Health Inc. v. Davila, and Cigna Healthcare of Texas Inc. v. Calad.

According to Reuter’s, the decision is a victory for insurers, which claim that lawsuits drive up the cost of health-care. Millions of Americans participate in employer-provided HMO health plans governed by the 1974 federal law. State laws have become more of a target because Congress has been unable to pass national legislation that would allow patients to sue HMOs in federal court for medical malpractice. At least nine other states — Arizona, California, Georgia, Maine, New Jersey, North Carolina, Oklahoma, Washington, and West Virginia — have laws similar to the Texas one.

“We are pleased with the Court’s decision. The Employee Retirement Income Security Act of 1974 (ERISA), which was at the heart of this case, has for many years helped to ensure that participants in health benefit plans have numerous protections, including access to quick resolution of any coverage disputes through internal and external appeals processes,” said CIGNA HealthCare in a statement.

Aetna also released a statement commending the Court’s unanimous decision, and reaffirmation of the 30-year-old Act, stating that “by affirming the role of ERISA in employee benefits the Court has helped to assure that millions of working Americans will continue to have access to quality health coverage provided by their employers.”