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Second Circuit Permits State Malpractice Suit against HMO

Published online by Cambridge University Press:  01 January 2021

Anna Lumelsky
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Extract

On February 11, 2003, the Second Circuit ruled in Cicio v. Vytra Healthcare that patients may in some cases sue health maintenance organizations (HMOs) for medical malpractice under state law. The decision is particularly notable for opening the door to state tort claims in an area that had heen considered preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

ERISA is a federal statute that regulates employee benefit plans, establishing a complex set of rules and minimum standards for most health and pension plans in private industry. ERISA requires that participants receive certain information about their benefits plans, and imposes fiduciary responsibilities on individuals with discretionary control over plan assets. These individuals have certain specific duties, and are required to work “solely in the interest of the participants and beneficiaries and for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan.”

Type
Article
Information
Journal of Law, Medicine & Ethics , Volume 31 , Issue 4 , Winter 2003 , pp. 734 - 736
Copyright
Copyright © American Society of Law, Medicine and Ethics 2003

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References

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