Second Circuit Permits State Malpractice Suit against HMO

Cicio v. Vytra Healthcare, 321 F.3d 83 (2d Cir. 2003).

29 U.S.C. § 1001 et seq (1974). See Crowley L. , “Health Law: Door Opens for Malpractice Claims to Outlast Preemption Disputes,” New York Law Journal, March 6, 2003, at 3.

See 29 U.S.C. § 1002(21)(A)(i)–(iii).

29 U.S.C. § 1104(a)(1)(A)(i) – (ii).

See U.S. Department of Labor, Health Plans & Benefit Employee Retirement Income Security Act — ERISA, at <http://www.dol.gov/dol/topic/health-plans/erisa.htm> (last visited May 1, 2003).

See Mertens v. Hewitt Assocs., 508 U.S. 248 (1993); Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985); Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002).

See Pear R. , “A Court Expands the Rights of Patients to Sue H.M.O.'s,” New York Times, February 18, 2003, at A14; Langbein J. , “What ERISA Means By Equitable: The Supreme Court's Trail of Error in Russell, Mertens, and Great West,” 1–95, at 1–2, at <www.ssrn.com> (last visited April 20, 2003). See also Cicio, 321 F.3d at 107. (Calabresi, J., dissenting).

See, e.g., Langbein , supra note 7; Borzi P. , “Pegram v. Herdrich: A Victory for HMOs or the Beginning of the End for ERISA Preemption?” Yale Journal of Health Policy, Law & Ethics, 1 (2001): 161–66; Befort S. Kopka C. , “The Sounds of Silence: The Libertarian Ethos of ERISA Preemption,” Florida Law Review, 52 (2000): 1–40.

29 U.S.C. § 1144.

See Langbein , supra note 7, at 25–26; New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995).

Travelers, 514 U.S. at 654. See also Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 365 (2002); California Div. of Labor Standards Enforcement v. Dillingham Const., N.A., Inc., 519 U.S. 316, 335–36 (1997) (Scalia, J., concurring).

Cicio, 321 F.3d at 86–87.

Id. at 87.

Id. at 87–88. See also Pear , supra note 7.

Id. at 88.

Id. at 88–89.

Cicio v. Vytra Healthcare, 208 F.Supp.2d 288 (E.D.N.Y. Sep 28, 2001); Cicio, 321 F.3d at 86.

Cicio, 321 F.3d at 100. See, e.g., Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482 (7th Cir.1996); Tolton v. American Biodyne, Inc., 48 F.3d 937 (6th Cir. 1995); Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir. 1992).

See sources cited at note 11, supra; Pegram v. Herdrich, 530 U.S. 211 (2000).

Pegram, 530 U.S. at 211. Since, as the Supreme Court noted, most HMOs involve some type of physician cost-minimization incentive scheme, the circuit court ruling posed a significant threat to the HMO system. See id. at 221.

Id. at 227–28.

Id. at 229.

It reached this conclusion largely through a comparison of ERISA fiduciary duty with common law fiduciary duty, under which “fiduciary duties characteristically attach to decisions about managing assets and distributing property to beneficiaries,” which the Court found to be quite different from the mixed decisions relevant to the facts of Pegram. Id. at 231.

Pegram, 530 U.S. at 236–237.

Cicio, 321 F.3d at 102. Since the case was before the Court on a motion to dismiss, it assumed the facts as alleged in deciding that the decision was “mixed,” and remanded the case to district court for a determination of whether this was in fact accurate.

Cicio, 321 F.3d at 99–100, 102.

Cicio, 321 F.3d at 103.

The Cicio court dismissed the plaintiffs negligence claims based on timeliness and misrepresentation because, in contrast to medical malpractice, Congress had “swept away all state regulation” in those areas. Id. at 99.

Id. at 106–110 (Calabresi, J., dissenting in part).

Id. at 106–108. (Calabresi, J., dissenting in part).

Id. (Calabresi, J., dissenting in part).

Id. (Calabresi, J., dissenting in part).

Id. at 108, n.2 (Calabresi, J., dissenting in part) (quoting Plumbing Indus. Bd. Local Union No. 1 v. E.W. Howell Co., 126 F.3d 61, 67 (2d Cir. 1997)).

Id. at 107 (Calabresi, J., dissenting in part).

Id. at 106 (Calabresi, J., dissenting in part).

Id. at 107 (Calabresi, J., dissenting in part).

See Pear , supra note 7.

See Crowley , supra note 2.

See, e.g., Moore T. Gaier M. , “Medical Malpractice; Recent Second Circuit Decision on HMO Liability,” New York Law Journal, March 10, 2003 at 3; Rep. Norwood C. , Congress Should Pass Patient Protections , March 5, 2003, at <http://www.hillnews.com/news/030503/ssh_norwood.aspx> (last visited April 29, 2003).

See Hechler D. , “The Wrestling Match with ERISA Goes On; Pre-emption Still an Abyss after Ruling,” National Law Journal, February 24, 2003 at A1.

See Hechler , supra note 51.

Cicio, 321 F.3d at 106. (Calabresi, J., dissenting).