For Part One, Aetna Loses, click here

Before the Goodrich v. Aetna verdict, the largest jury award against an HMO came in 1993, when a California jury awarded the family of Nelene Fox $89 million. Fox, who died of breast cancer before the verdict, was denied coverage for a bone marrow transplant by her HMO, Health Net. That case was appealed, and was settled out of court.

"I was thrilled with the Goodrich verdict," said attorney Mark Hiepler, who represented his sister in Fox v. Health Net. "We have to keep sending a message that people won’t stand for second-class health care."

The Goodrich verdict is likely to lead to some changes in managed health care, Hiepler said. But until a fundamental change in the way health plan beneficiaries are allowed to seek damages from their health plan, change will be slow, he added.

Currently, employer-based health insurance providers are afforded protection under the Employee Retirement Income Security Act, known as ERISA, which precludes consumers from seeking damages for denial of care that results in death, injury or economic loss. The law only allows the consumer to recover the value of the benefit, the cost of treatment, for example.

ERISA, however, does not apply to government and church employees or those who buy health insurance directly from an insurance company. David Goodrich was allowed wider latitude because he was a government employee.

Making Changes

"No swifter change comes than when it comes from a jury verdict," Hiepler said.

The managed care industry disagrees, believing opening the courtroom doors will eventually lead to higher premiums, the one thing managed care was designed to eliminate.

"Using the courts is not an efficient way to get relief from the health care system," said Don White, a spokesman for the American Association of Health Plans (AAHP), a trade association of managed care insurance providers. "Clearly, the trial lawyers think that multi-million dollar judgments are good, but the judicial system is not the most efficient way to effect change."

AAHP believes denied referrals should be reviewed by an outside panel of physicians and experts, as opposed to internal committees.

Some states and Medicare are already requiring HMOs to use a third-party review system, White added. A week before the Goodrich verdict, Aetna announced that it would form an external review board that would make recommendations following two internal reviews.

"What Aetna has committed to following is the plan of external review," said Arthur Liebowitz, MD, chief medical officer for Aetna US HealthCare. "We cover treatment when the best medical opinions available say a procedure can be done successfully."

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