Slouching toward managed care liability: Reflections on doctrinal boundaries, paradigm shifts, and incremental reform

Journal of Law, Medicine and Ethics

Volumn 29, Issue 9999, 2001, Pages 253-277

  Mariner, Wendy K ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; FINANCIAL MANAGEMENT; HEALTH INSURANCE; HUMAN; LEGAL ASPECT; LEGAL LIABILITY; MALPRACTICE; PENSION; UNITED STATES;

CONTRACT SERVICES; EMPLOYEE RETIREMENT INCOME SECURITY ACT; HUMANS; LIABILITY, LEGAL; MALPRACTICE; MANAGED CARE PROGRAMS; UNITED STATES;

EID: 0035467777     PISSN: 10731105     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1748-720x.2001.tb00347.x     Document Type: Article

References (194)

1. W.B. Yeats, "The Second Coming," in The Collected Poems of W.B. Yeats (New York: The Macmillan Company, 1964): 184. Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. Surely some revelation is at hand; Surely the Second Coming is at hand. The Second Coming! Hardly are those words out When a vast image out of Spiritus Mundi Troubles my sight: somewhere in sands of the desert A shape with lion body and the head of a man, A gaze blank and pitiless as the sun, Is moving its slow thighs, while all about it Reel shadows of the indignant desert birds. The darkness drops again; but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?
2. For arguments in favor of holding managed care organizations liable for wrongdoing, see, e.g., G.J. Annas, "A National Bill of Patient Rights," N. Engl. J. Med., 338 (1998): 695-99;
3. W.K. Mariner, "What Recourse - Liability for Managed-Care Decisions and the Employee Retirement Income Security Act," N. Engl. J. Med., 343 (2000): 592-96;
4. C.C. Havighurst, "Vicarious Liability: Relocating Responsibility for the Quality of Medical Care," American Journal of Law & Medicine, 26 (2000):7-29.
5. For arguments against liability, see, e.g., D.A. Hyman, "Accountable Managed Care: Should We Be Careful What We Wish For?," University of Michigan Journal of Law Reform, 32 (1999): 785-811;
6. ERISA Industry Committee, "Updated ERIC Analysis of the Liability Provision in H.R. 2723/H.R. 2990 and Its Impact on Employers," (Washington, D.C.: ERISA Industry Committee, 1999);
7. P.M. Danzon, "Tort Liability: A Minefield for Managed Care," Journal of Legal Studies, 26 (1997): 491-519;
8. K. Ignagni, "Risk Without Reward: Health Plan Liability Would Increase Lawsuits and Costs, Wouldn't Help Patients," Modern Healthcare, August 3, 1998, at 25.
9. 29 U.S.C. §§ 1001 et seq. For an introduction to ERISA and the issue of preemption of state liability claims, see B.R. Furrow et al., Health Law: Cases, Materials and Problems, 4th ed. (St. Paul, Minnesota: West Group, 2001): at 298-306, 601-42.
10. M. Minow, "Partners, Not Rivals? Redrawing the Lines Between Public and Private, Non-Profit and Profit, and Secular and Religious," Boston University Law Review, 80 (2000): 1061-94.
11. F.H. Miller and W.W. Miller Jr., "Lessons to Be Learned from Harvard Pilgrim HMO's Fiscal Roller Coaster Ride," Journal of Law, Medicine & Ethics, 28, no. 3 (2000): 287-304.
12. R.P. Merges, "One Hundred Years of Solicitude: Intellectual Property Law, 1900-2000," California Law Review, 88 (2000): 2189-240;
13. G. Harper, "Developing a Comprehensive Copyright Policy to Facilitate Online Learning," Journal of College & University Law, 27, no. 1 (2000): 5-14;
14. K.D. Crews, "Distance Education and Copyright Law: The Limits and Meaning of Copyright Policy," Journal of College & University Law, 27, no. 1 (2000): 15-51.
15. P.A. Roche and G.J. Annas, "Protecting Genetic Property," Nature Reviews/Genetics, 2 (2001): 392-96;
16. R. Cook-Degan, "Confidentiality, Collective Resources, and Commercial Genomics," in M.A. Rothstein, ed., Genetic Secrets: Protecting Privacy and Confidentiality in the Genetic Era (New Haven: Yale University Press, 1997): 161-83.
17. A South African law signed by former President Nelson Mandela authorizes the country to import generic versions of patented drugs without the patent owner's consent. The Medicines and Related Substances Act of 1997 allows parallel marketing and compulsory licensing where patent owners do not meet demand. Although thirty-nine pharmaceutical companies challenged that law in a South African court, the companies' position lost favor in the international community. H. Cooper, R. Zimmerman, and L. McGinley, "AIDS Epidemic Traps Drug Firms in a Vise: Treatment vs. Profits," Wall Street Journal, March 2, 2001, at A1.
18. The companies ultimately settled their lawsuit with the government. R.L. Swarns, "Drug Makers Drop South Africa Suit Over AIDS Medicine," New York Times, April 20, 2001, at A1.
19. M. Peterson, "Lifting the Curtain on the Real Costs of Making AIDS Drugs," New York Times, April 24, 2001, at B1, B10.
20. R. Pear, "States Creating Their Own Plans to Cut Drug Costs," New York Times, April 23, 2001, at A1;
21. G. Harris, "Adverse Reaction: AIDS Gaffes in Africa Come Back to Haunt Drug Industry at Home," The Wall Street Journal, April 23, 2001, at A1.
22. (A sign of the times may be the fact that the villain in John le Carre's "The Constant Gardener" is a pharmaceutical company.)
23. A.B. LaFrance, "Tobacco Litigation: Smoke, Mirrors and Public Policy," American Journal of Law & Medicine, 26 (2000): 187-203;
24. G.J. Annas, "Tobacco Litigation as Cancer Prevention: Dealing with the Devil," N. Engl. J. Med., 336 (1997): 304-08.
25. See also United States v. Philip Morris, Inc., 116 F. Supp. 2d 131 (D.C. 2000) (action on behalf of Medicare).
26. T.S. Griggs, "Medicaid Reimbursement from Tobacco Manufacturers: Is the States' Legal Position Equitable?," University of Colorado Law Review, 69 (1998): 799-823. Federal class actions have had mixed results.
27. Hamilton v. Beretta U.S.A. Corp., 2001 N.Y. LEXIS 946 (No. 36, Apr. 26, 2001); D. Kairys, "Legal Claims of Cities Against the Manufacturers of Handguns," Temple Law Review, 71 (1998): 1-21.
28. Maio v. Aetna, 221 F.3d 472 (3d Cir. 2000); Humana, Inc. v. Forsyth, 525 U.S. 299 (1999);
29. C.C. Havighurst, "Consumers Versus Managed Care: The New Class Actions," Health Affairs, 20, no. 14 (July/August 2001): 8-27. Class actions against managed care organizations have had less success than individual personal injury cases, a result that is the opposite of tobacco litigation.
30. But see Carter v. Brown & Williamson Tobacco Corporation, No. SC94797 (Sup. Ct. Fla. Nov. 22, 2000) (awarding $144.8 billion to an individual smoker), available at 〈http://www.tobacco.neu.edu/Extra/hotdocs/carter_v_ b&w_fla_sup_ct_11-22-2000.htm〉.
31. T. Christoffel and S.P. Teret, Protecting the Public - Legal Issues in Injury Prevention (New York: Oxford University Press, 1993): 160-61 (describing a pattern in the use of products liability litigation to change law and social policy where efforts - through persuasion, regulation, or legislation - to reduce product risks have failed advocates' goals).
32. M. Clarke, Policies and Perceptions of Insurance (Oxford: Clarendon Press, 1997);
33. B. Schatz, "The AIDS Insurance Crisis: Underwriting or Overreaching?," Harvard Law Review, 100 (1987): 1782-805.
34. W.K. Mariner, "Business vs. Medical Ethics: Conflicting Standards for Managed Care," Journal of Law Medicine & Ethics, 23, no. 3 (1995): 236-46.
35. W.K. Mariner, "Standards of Care and Standard Form Contracts: Distinguishing Patient Rights and Consumer Rights in Managed Care," Journal of Contemporary Health Law & Policy, 15, no. 1 (1998): 1-55;
36. P.D. Jacobson and M.T. Cahill, "Applying Fiduciary Responsibilities in the Managed Care Context," American Journal of Law & Medicine, 26 (2000): 155-73 (calling the tort-contract debate "a dead end in addressing managed care's potential conflicts" and also arguing for holding managed care organizations to fiduciary duties).
37. M. Galanter, "Makers of Tort Law," DePaul Law Review, 49 (1999): 559-65.
38. M. Galanter, DePaul Law Review, Id.
39. R.L. Abel, "Questioning the Counter-Majoritarian Thesis: The Case of Torts," DePaul Law Review, 39 (1999): 533-57.
40. M. Galanter, "Why the 'Haves' Come Out Ahead: Speculations on the Limits of Legal Change," Law & Society Review, 9 (1974): 95-160;
41. M. Galanter, "Farther Along," Law & Society Review, 33 (1999): 1113-21.
42. R.R. Bovbjerg and R.H. Miller, "Managed Care and Medical Injury: Let's Not Throw Out the Baby with the Backlash," Journal of Health Politics, Policy and Law, 24 (1999): 1145-57;
43. F.J. Hellinger, "The Effect of Managed Care on Quality: A Review of Recent Evidence," Archives of Internal Medicine, 158 (1998): 833-41.
44. D.A. Hyman, "Regulating Managed Care: What's Wrong with a Patient Bill of Rights?," Southern California Law Review, 73 (2000): 221-75;
45. D.A. Rochefort, "The Role of Anecdotes in Regulating Managed Care," Health Affairs, 17 (1998): 142-49.
46. There is some evidence that for-profit health plans do worse on some HEDIS quality-of-care measures. D.U. Himmelstein et al., "Quality of Care in Investor-Owned Versus Not-for-Profit HMOs," Journal of the American Medical Association, 282 (1999): 159-63. The reasons may also depend upon financial performance, profitability, degree of competition among managed care organizations and providers, presence of large employers, and the type of population served.
47. P.H. Born and C.J. Simon, "Patients and Profits: The Relationship Between HMO Financial Performance and Quality of Care," Health Affairs, 20 (2001): 167-74.
48. S.J. Singer, "What's Not to Like About HMOs," Health Affairs, 19 (2000): 206-09;
49. C.C. Havighurst, "Managed Care - Work in Progress or Stalled Experiment?," Houston Law Review, 35 (1999): 1385-92;
50. W.A. Zelman and R.A. Berenson, The Managed Care Blues and How to Cure Them (Washington, D.C.: Georgetown University Press, 1998);
51. R.H. Brook, "Managed Care Is Not the Problem, Quality Is," JAMA, 278, no. 19 (1997): 1612-14;
52. R.H. Miller and H.S. Luft, "Does Managed Care Lead to Better or Worse Quality of Care?," Health Affairs, 16 (1997): 7-25;
53. L. Etheredge, S.B. Jones, and L. Lewin, "What Is Driving Health System Change?," Health Affairs, 15, no. 4 (Winter 1996): 93-104.
54. M.A. Rodwin, "Backlash as Prelude to Managing Managed Care," Journal of Health Politics Policy & Law, 24 (1999): 1115-26.
55. Health insurance premiums have increased in the range of 10 percent the past two years. The strong economy, with low unemployment, may have encouraged employers to maintain health plans even in the face of rising premiums. P. Fronstin, "Employment-Based Health Benefits: Trends and Outlook," EBRI Issue Brief, No. 233 (May 2001);
56. J. Gabel et al., "JobBased Health Insurance in 2000: Premiums Rise Sharply While Coverage Grows," Health Affairs, 19, no. 3 (September/October 2000): 144-51. The prospects for continued high levels of insurance coverage might be threatened by recession or rising unemployment.
57. M.A. Rodwin, "Accountability in Managed Care: Managed Care and the Elusive Quest for Accountable Health Care," Widener Law Symposium, 1 (1996): 65-88.
58. B.R. Furrow, "Regulating the Managed Care Revolution: Private Accreditation and a New System Ethos," Villanova Law Review, 43 (1998): 361-107.
59. See Mariner, supra note 18 (attempting to distinguish consumer issues from patient issues for the purpose of applying relevant law). But see discussion infra in text accompanying note 92, suggesting tests to distinguish tort from contract issues.
60. See, e.g., R.A. Epstein, "Medical Malpractice: The Case for Contract," American Bar Foundation Research Journal, 35 (1976): 87-149.
61. Clark Havighurst also argues that relationships between patients and their physicians and managed care organizations could benefit from better private contracting, although his intention is not to describe applicable law but to encourage greater use of contracts. C.C. Havighurst, Health Care Choices: Private Contracts as Instruments of Health Reform (Washington, D.C.: AEI Press for the American Enterprise Institute for Public Policy Research, 1995).
62. R.A. Epstein and A.O. Sykes, "The Assault on Managed Care: Vicarious Liability, Class Actions and the Patient's Bill of Rights," Journal of Legal Studies (forthcoming): 5 (on file with author).
63. Epstein and Sykes, supra note 33, at 5-6. There is little evidence that tort dominates contract, even in reported decisions. See M.A. Hall et al., "Judicial Protection of Managed Care Consumers: An Empirical Study of Insurance Coverage Disputes," Seton Hall Law Review, 26 (1996): 1055-68;
64. W.E. Rice, "Judicial Bias, The Insurance Industry and Consumer Protection: An Empirical Analysis of State Supreme Courts' Bad-Faith, Breach-of-Contract, Breach-of-Covenant-of-Good-Faith and Excess Judgment Decisions," Catholic University Law Review, 41 (1992): 325-82.
65. M.A. Hall, "Institutional Control of Physician Behavior: Legal Barriers to Health Care Cost Containment," University of Pennsylvania Law Review, 137 (1988): 431-536.
66. Mariner, supra note 18 (discussing insurance policies as standard form contracts and contracts of adhesion, their use in managed care, and the different expectations of managed care organizations and individuals). See, generally, R.H. Jerry II, Understanding Insurance Law, 2d ed. (New York: Matthew Bender, 1996).
67. About 154.8 million nonelderly Americans had employment-based health benefit coverage in 1998, including 6.2 million federal employees and 22.9 state and local government employees. The remaining 125.7 million nonelderly Americans were covered by private employment-based health plans that are subject to ERISA. Estimates of the proportion of individuals in private employer-based plans that are self-funded (or self-insured), which are more difficult to make, range between 39 percent and 43 percent, which would include from 49 million to 54 million people. C. Copeland, "Nonelderly Individuals with Employment-Based and Individually Purchased Health Care Coverage," EBRI Notes, 20, no. 5 (May 2000): 3-7. In addition, about 15.5 million Americans purchased individual coverage directly from an insurance company or managed care organization, not through an employer.
68. Engalla v. Permanente, 15 Cal. 4th 951, 64 Cal. Rptr. 2d 843, 938 P.2d 903 (1997) (discussing employer's consideration of efficient arbitration as a desirable element of health plans when acting as agent for their employees). The evidence on how well employers choose health plans for their employees and how well their employees think they are performing is mixed. Some employees welcome an employer's ability to negotiate on their behalf from a position of strength.
69. P. Fronstin and R. Helman, "Findings from the 2000 Health Confidence Survey," EBRI Notes, 22, no. 4 (April 2001): 3-6. But employers vary considerably in their knowledge of health plans and the factors on which they base their choices.
70. J.R. Gabel, K.A. Hunt, and K. Hurst, When Employers Choose Health Plans Do NCQA Accreditation and HEDIS Data Count? (Monograph) (New York: Commonwealth Fund, September 1998).
71. S. Edgman-Levitan and P. Cleary, "What Information Do Consumers Want and Need?," Health Affairs, 15 (1996): 42-56.
72. M.A. Hall and G.F. Anderson, "Models of Rationing: Health Insurers' Assessment of Medical Necessity," University of Pennsylvania Law Review, 140 (1992): 1637-712.
73. The uncontroversial proposition that two people should be able to contract for enforceable terms for future medical care provides scant support for imposing particular rules on patients in a managed care plan.
74. Few people behave as rational economic beings as economic theory requires. C.R. Sunstein, ed., Behavioral Law and Economics (Cambridge: Cambridge University Press, 2000);
75. K. Huigens, "Law, Economics and the Skeleton of Value Fallacy," California Law Review, 89 (2001): 537-68. In Western European countries, where the law and economics movement is generally considered an American aberration, the argument is rarely, if ever, taken seriously.
76. Adherence to freedom of contract can force proponents into awkward positions. For example, if laws against the sale of human beings or body parts infringes on freedom of contract, then trafficking in human beings as well as organs enhances freedom and should not be banned. See, e.g., R.A. Epstein, Mortal Peril (New York: Addison-Wesley, 1997).
77. M. Pettit, Jr., "Freedom, Freedom of Contract, and the 'Rise and Fall,'" Boston University Law Review, 79 (1999): 263-354.
78. Consumers' freedom is often described as the "freedom" to buy fewer services or lower quality. It is almost never described as the freedom to obtain better or more services. See, e.g., M.A. Hall, Making Medical Spending Decisions: The Law, Ethics, and Economics of Rationing Mechanisms (New York: Oxford University Press, 1996).
79. Pettit compares T.H. Green, who defined freedom as being free from natural constraints like the burdens of nature, including weather and wild beasts, T.H. Green, "Lecture on Liberal Legislation and Freedom of Contract," in R.L. Nettleship, ed., Works of Thomas Hill Green, vol. 3 (London: Longmans, Green, and Company, 1906): 365, 371, and Isaiah Berlin, who rejected any positive conception of liberty,
80. I. Berlin, "Two Concepts of Liberty," in Four Essays on Liberty (Oxford: Oxford University Press, 1969): 118, 133 n.1, 150. This suggests that people may be freer when they join together to accomplish something that no individual can do alone, such as fighting a forest fire, building a bridge, or even creating a mutual insurance group to provide medical care that no one could afford alone.
81. For example, Pettit asks, does it matter to an explorer who has been trapped in a cave that his freedom has been constrained by another person blocking the exit or by an avalanche that seals off the exit? If the only constraints that count as obstacles to freedom are those imposed by other people, then he should feel free if an avalanche traps him and not free if another person traps him. Yet, it is hard to imagine a person feeling free when trapped in a cave, no matter what the cause. Pettit, supra note 44, at 276. Similarly, one might ask whether the explorer feels free after falling rocks break his leg, merely because no person blocks his way.
82. This is the classic police power question: When does intervention protect an individual's liberty and when does it become paternalistic or coercive? See, e.g., R.L. Rabin and S.D. Sugarman, Smoking Policy: Law, Policy & Culture (New York: Oxford University Press, 1993).
83. Pettit, supra note 44.
84. Id.
85. F. Kessler, "Contracts of Adhesion - Some Thoughts about Freedom of Contract," Columbia Law Review, 43 (1943): 629-42, at 640. Kessler noted that freedom of contract developed hand in glove with capitalism and the development of markets with small merchants. While the marketplace and the nature of the contracts in use have changed dramatically, the small merchant and individually negotiated contracts remain the dominant paradigm of freedom of contract.
86. Pettit, supra note 44, at 269.
87. Galanter, "Why the 'Haves' Come Out Ahead," supra note 22, at 95-97.
88. R. Kreitner, "Speculations of Contract, or How Contract Law Stopped Worrying and Learned to Love Risk," Columbia Law Review, 100 (2000): 1096-138;
89. M.A. Eisenberg, "The Emergence of Dynamic Contract Law," California Law Review, 88 (2000): 1743-814. For suggestions that contract law can be applied to "consumer" issues, such as premiums prices, benefit exclusions, financial caps on benefits, choice-of-technology assessment standards, and procedures for filing grievances, see Mariner, supra note 18.
90. W.L. Prosser, Handbook of the Law of Torts, 4th ed. (St. Paul, Minnesota: West Publishing Co., 1971). A modern casebook describes tort law as "a body of legal principles aiming to control or regulate harmful behavior; to assign responsibility for injuries that arise in social interaction; and to provide recompense for victims with meritorious claims. It is commonly said that the main concern of tort is redress for harm done, and that the main job of the law of torts is to determine when loss shall be shifted from one to another, and when it shall be allowed to remain where it has fallen."
91. R.E. Keeton, L.D. Sargentich, and G.C. Keating, Tort and Accident Law, 3d ed. (St. Paul, Minnesota: West Group, 1998): at 1.
92. A. Bernstein, "Better Living Through Crime and Tort," Boston University Law Review, 76 (1996): 169-92.
93. G.T. Schwartz, "Medical Malpractice, Tort, Contract, and Managed Care," University of Illinois Law Review, vol. 1998, no. 3 (1998): 885-907 (noting malpractice law's stability over time).
94. A. Bernstein, "New Torts: Are They Being Developed? If So, Where, When & Why?," DePaul Law Review, 49 (1999): 413-33.
95. R.L. Rabin, "Enabling Torts," DePaul Law Review, 49 (Winter 1999): 435-53, at 438-39. Of course, the primary reason that plaintiffs claim against these "enablers" is that the immediate wrongdoer (e.g., the drunk driver, rapist, thief) is judgment proof. So allowing liability serves the economic function of providing compensation to which the plaintiff would be entitled, albeit from another party (who may face criminal charges).
96. Vicarious liability on the part of managed care organizations can be justified on grounds of economic efficiency - where an employee has insufficient assets to pay damages for injury, where employees lack incentives to avoid injuring others, or where employers lack incentives to control their employees and to internalize the full costs of such injuries. However, law and economics scholars also may conclude that managed care organizations should not bear vicarious liability for physician malpractice, especially where the physician actually made the patient care decision, because physicians who are not employees are generally less subject to managed care organization control and are capable of bearing the financial risk of liability. A.O. Sykes, "The Economics of Vicarious Liability," Yale Law Journal, 93 (1984): 1231-80.
97. Prosser, supra note 55, at 614. "Where the defendant has done something more than remain inactive, and is to be charged with 'misfeasance,' the possibility of recovery in tort is considerably increased." Id. at 616. However, Prosser noted even in contract cases of nonfeasance, there are several areas in which "the failure to perform a contract may amount to a tort." Id. at 615. These include the obligations of public accommodations and public carriers. They also include cases in which the contract creates a relationship in which the law imposes some affirmative duty on one party, such as an employer who has a duty to furnish a safe workplace. Id. at 616.
98. Id. at 617.
99. S.D. Sugarman, "A Century of Change in Personal Injury Law," California Law Review, 88 (2000): 2403-36.
100. L.T. Kohn, J.M. Corrigan, and M.S. Donaldson, eds., Committee on Quality of Health Care in America, Institute of Medicine, To Err Is Human: Building a Safer HeaHh System (Washington, D.C.: National Academy Press, 1999), available at 〈http://books.nap.edu/books/0309068371/html/R1.html #pagetop〉.
101. Both the federal and state governments are exploring ways to protect patients against injuries from all sources. Doing What Counts for Patient Safety: Federal Actions to Reduce Medical Errors and Their Impact, Report of the Quality Interagency Coordination Task Force (QuIC) to the President (February 2000), available at 〈http://www.quic.gov/report/toc.htm〉; J. Rosenthal and T. Riley, Patient Safety and Medical Errors: A Road Map for State Action (Portland, Maine: National Academy for State Health Policy, March 2001), available at 〈http://www.nashp.org/ GNL37.pdf〉.
102. R.R. Bovbjerg, R.H. Miller, and D.W. Shapiro, "Paths to Reducing Medical Injury: Professional Liability vs. Patient Safety - and the Need for a Third Way," Journal of Law, Medicine & Ethics, 29, nos. 3 and 4 (2001): 369-80;
103. R.R. Bovbjerg, "Summary of Testimony: Reporting Systems for Medical Error: Options and Issues," to the Committee on Commerce, Subcommittee on Health and Environment, U.S. House of Representatives, Feb. 9, 2000, available at 〈http://www.house.gov/va/hearings/ schedule106/feb00/2-9-00/RBovberg.htm〉;
104. L.L. Leape et al., "Promoting Patient Safety by Preventing Medical Error," JAMA, 280 (1998): 1444-47;
105. L. Leape, "Error in Medicine," JAMA, 272 (1994): 1851-57.
106. State Reporting for Medical Errors and Adverse Events: Results of a 50-State Survey (Portland, Maine: National Academy for State Health Policy, April 2000).
107. E.R. Anderson, J.S. Stanzler, and L.S. Masters, Insurance Coverage Litigation, 2d ed. (Gaithersburg, Maryland: Aspen Law & Business, 2000);
108. J.W. Stempel, Law of Insurance Contract Disputes, 2d ed. (New York: Aspen Law & Business, 1999);
109. R.C. Henderson, "The Tort of Bad Faith in First-Party Insurance Transactions After Two Decades," Arizona Law Review, 37 (1995): 1153-82;
110. D.R. Richmond, "An Overview of Insurance Bad Faith Law and Litigation," Seton Hall Law Review, 25 (1994): 74-140;
111. S.D. Gresham, "'Bad Faith Breach': A New and Growing Concern for Financial Institutions" (comment), Vanderbilt Law Review, 42 (1989): 891-916.
112. Comunale v. Traders and General Insurance Co., 328 P.2d 198 (Cal. 1958); Gruenberg v. Aetna Insurance Co., 108 Cal. Rptr. 480 (Cal. 1973); McCorkle v. Great Atlantic Ins., 637 P.2d 583 (Okla. 1981).
113. See, generally, B.S. Ostrager and T.R. Newman, Handbook of Insurance Coverage Disputes, 10th ed. (New York: Aspen Law & Business, 2000).
114. N.J. Johnson, "The Boundaries of Extracompensatory Relief for Abusive Breach of Contract," Connecticut Law Review, 33 (2000): 181-98.
115. See, e.g., Code of Ala. § 27-12-24 ("No insurer shall, without just cause, refuse to pay or settle claims arising under coverages provided by its policies in this state and with such frequency as to indicate a general business practice in this state....").
116. J.B. Stern, "Bad Faith Suits Against HMOs: Finally, A Breakthrough," Whittier Law Review, 20 (1998): 313-23.
117. Walker v. Group Health Services, Inc., No. 94,380, 2001 Okla. LEXIS 4 (Okla. January 16, 2001); Long v. Great West Life & Annuity Ins. Co., 957 P.2d 823 (Wyo. 1998); Goodrich v. Aetna U.S. Healthcare of California, Inc., No. RCV 20499, 1999 WL 181418 (Cal. App. Dep't Super. Ct. March 29, 1999); McEvoy v. Group Health Cooperative of Eau Claire, 570 N.W.2d 397 (Wis. 1997); Sarchett v. Blue Shield of California, 729 P.2d 267 (Cal. 1987); Williams v. Health America, 535 N.E.2d 717 (Ohio Ct. App. 1987).
118. W.T. Barker, "Evidentiary Sufficiency in Insurance Bad Faith Claims," Connecticut Insurance Law Journal, 6 (1999/2000): 81-147, at 92 ("the abuse forbidden by the law of first-party bad faith is forcing the insured to litigate to collect benefits when no bona fide question justifies litigation").
119. W.K. Mariner, "Liability for Managed Care Decisions: The Employee Retirement Income Security Act (ERISA) and the Uneven Playing Field," American Journal of Public Health, 83 (1996): 863-69.
120. See note 37 supra.
121. ERISA § 502(a) authorizes participants in ERISA plans to bring suit against the plan in federal court for denying plan benefits or improper processing of benefit claims. 29 U.S.C. § 1332(a). See, e.g., Velez v. Prudential Health Care Plan of New York, Inc., 943 F. Supp. 332 (S.D.N.Y 1996). However, the remedy for successful suits has been interpreted to be limited to the cost of the benefit - the amount payable to the provider for a diagnostic test, hospitalization, or treatment - and not to include damages for personal injury, such as lost income, additional medical expenses, or non-economic losses. The vast majority of courts have found that ERISA provides an exclusive federal remedy for patient claims of benefit denial. State law causes of action for benefit denials are therefore completely preempted by ERISA, and no claim for additional damages may be brought in state court. See, e.g., Bast v. Prudential Insurance Co. of America, 150 F.3d 1003 (9th Cir. 1998); Turner v. Fallon Community Health Plan, 127 F.3d 196 (1st Cir. 1997), cert. denied, 523 U.S. 1072 (1998). However, what counts as a benefit denial remains controversial. See discussion infra in text accompanying notes 86-91.
122. Claims of personal injury caused by physician malpractice have been generally held to be actionable under negligence or medical malpractice law in state courts. These are not completely preempted because ERISA provides no remedy for such claims. Managed care organizations that provide benefits under ERISA plans have attempted to dismiss such claims on the grounds that they are subject to conflict preemption under ERISA § 514(a), which preempts any state law that "relates to" an ERISA plan. In other words, § 514(a) provides a defense to a state law cause of action, but does not provide a federal remedy. However, most courts have held that malpractice claims against a physician do not relate to an ERISA plan, but to the quality of care - a subject traditionally regulated by the states. See Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir.), cert. denied, 530 U.S. 1242 (1995) (drawing on New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995)). Such claims are not preempted and can go forward in state court. A managed care organization can be vicariously liable for the medical malpractice of an employee. See, e.g., Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482 (7th Cir. 1996); Rice v. Panchal, 65 F.3d 637 (7th Cir. 1995); Pacificare of Oklahoma, Inc., 59 F.3d 151 (10th Cir. 1995); Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir.), cert. denied, 530 U.S. 1242 (1995). However, claims against a managed care organization that are not predicated on employee or agent malpractice and also do not assert any benefit denial under § 502(a) have generally been found to be preempted on the basis of § 514(a) conflict preemption. For example, a claim that a managed care organization delayed approving benefits so that the patient could not receive appropriate treatment charges the managed care organization, not the physician, with negligence or worse, but because benefits (some form of treatment) were ultimately received, the patient has no claim for benefit denial. See, e.g., Hull v. Fallon, 188 F.3d 939 (8th Cir. 1999) (medical malpractice claim for failure to diagnose myocardial infarction found to be claim for denial of benefits - namely, thallium stress test); Kuhl v. Lincoln National Health Plan of Kansas City, Inc., 999 F.2d 298 (8th Cir. 1993). Such cases leave the patient without any remedy, state or federal.
123. Dukes v. U.S. Healthcare, Inc., 57 F.3d 350 (3d Cir.), cert. denied, 530 U.S. 1242 (1995).
124. Bauman v. U.S. Healthcare, Inc. (In re U.S. Healthcare), 193 F.3d 151 (3d Cir. 1999), cert. denied, 530 U.S. 1242 (2000); Lazorko v. Pennsylvania Hospital, 237 F.3d 242 (3d Cir. 2000) (claim that managed care organization's refusal to rehospitalize patient with depression and schizophrenia resulted in patient's suicide was found to be an exercise of medical judgment about what, if any, treatment to provide, even if influenced by financial incentives to physicians, and not preempted by ERISA); Nealy v. U.S. Healthcare HMO, 93 N.Y.2d 209, 711 N.E.2d 621 (N.Y 1999) (claim that physician delayed submitting request to health maintenance organization to authorize referral to out-of-network cardiologist found not to relate to ERISA plan because claim was for physician's own failure to treat patient, not the HMO's delay).
125. Bauman, 193 F.3d at 162 (plaintiffs claimed that their newborn died of meningitis that was not diagnosed or treated as a result of the MCO's hospital discharge policy and its utilization policies discouraging physicians from readmitting infants, despite acceptable medical standards indicating a need for immediate treatment).
126. The defendants could raise the defense that ERISA § 514(a) preempts the state law claims of malpractice in the state court action. Id.
127. More specifically, defendants move to remove cases brought in state court to federal court, typically on the grounds that the claim is really for the denial of benefits, which is completely preempted, and must be brought in federal court as an ERISA § 502(a) claim or not at all. See, e.g., M.J. Bidart and R. Echeverria, "Litigating an HMO Bad Faith Case from the Plaintiff's Perspective and the Lessons of Goodrich v. Aetna," Whittier Law Review, 22 (2000): 427-46 (outlining the plaintiff's arguments against ERISA preemption);
128. S.D. Pomfret, "Emerging Theories of Liability for Utilization Review under ERISA Health Plans," Tort & Insurance Law Journal, 34 (1998): 131-66 (outlining defense arguments for ERISA preemption).
129. See, e.g., Bast v. Prudential Ins. Co. of America, 150 F.3d 1003 (9th Cir. 1998); Tolton v. American Diodyne, Inc., 48 F.3d 937 (6th Cir. 1995); Kuhl v. Lincoln National Health Plan of Kansas City, Inc., 999 F.2d 298 (8th Cir. 1993); Spain v. Aetna Life Ins. Co., 11 F.3d 129 (9th Cir. 1993) (all including claims for delaying authorization of specific treatment or providers); Hollis v. Provident Life and Accident Insurance Company, 259 F.3d 410 (5th Cir. 2001) (bad faith denial of disability benefits claim).
130. Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41 (1987).
131. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995); DeBuono v. NYSA-ILSA Medical and Clinical Services Fund, 520 U.S. 806 (1997); Unum Life Insurance Company of America v. Ward, 526 U.S. 358 (1999). Epstein and Sykes agree that ERISA's failure to allow consequential damages for personal injury resulting from an improper denial of benefits creates a clear incentive to deny benefits. They argue that routine denial of benefits is likely to result in complaints to the employer, who will react by changing health plans. Epstein and Sykes, supra note 33, at 28. That is an empirical question that deserves study.
132. Lazorko v. Pennsylvania Hospital, 237 F.3d 242 (3d Cir. 2000) (husband argued that the patient's physician was influenced by the MCO's financial penalties on additional hospitalizations).
133. Id. at 250.
134. Pryzbowski v. U.S. Healthcare, 245 F.3d 266 (3d Cir. 2001). See discussion infra in text accompanying note 115.
135. Pegram v. Herdrich, 530 U.S. 211, 120 S. Ct. 2143 (2000).
136. A bad faith claim based on a state statute might still be preempted by ERISA § 514(a) if the court determines that the state statute relates to the ERISA plan but is not saved as insurance regulation.
137. One might also argue that it may be necessary to refer to the ERISA plan to determine whether the MCO has the discretion to determine which provider provides the care and what, if any, standards it must use to do so, thereby relating the cause of action to the ERISA plan. This argument relies on a somewhat literal interpretation of the phrase "having a connection with or reference to" an ERISA plan, used in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97 (1083), and District of Columbia v. Greater Washington Bd. Of Trade, 506 U.S. 125, 129 (1992). This seems a thin reed on which to hang current arguments.
138. These answers might apply as rebuttable presumptions, but the evidence required to determine whether the presumption applies in the first place should be sufficient to resolve the question on the merits, so that presumptions are not necessary.
139. Critics of these principles make the point that the abuse-of-discretion standard of review (for ERISA plans that grant plan administrators discretion to interpret the plan) grants excessive discretion to ERISA plan administrators to determine the scope of benefits. To the extent that such discretion has been permitted in cases that should have been allowed to proceed as negligence actions in state court, the personal medical information test may help to reduce the opportunities for overly expansive interpretations of discretion.
140. Jacobson and Cahill, supra note 18 (proposing a detailed scheme distinct from existing tort duties); Mariner, supra note 18 (arguing for an extracontractual negligence standard by which to judge MCO patient care decisions); M.J. Mehlman, "Fiduciary Contracting: Limitations on Bargaining Between Patients and Health Care Providers," University of Pittsburgh Law Review, 51 (1990): 365-417 (focusing on patient care decisions that fit most easily into traditional medical professional obligations).
141. D.R. Richmond, "Trust Me: Insurers Are Not Fiduciaries to Their Insureds," Kentucky Law Journal, 88 (1999/2000): 1-32.
142. See D.M. Muir, "Fiduciary Status as an Employer's Shield: The Perversity of ERISA Fiduciary Law," Journal of Labor & Employment Law, 2 (2000): 391-462 (explaining this distinction in the context of ERISA benefit plans).
143. Perhaps the most cited formulation is that of Judge Cardozo in Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 546 (1928): "Many forms of conduct permissible in a workaday world for those acting at arm's length are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior." Law has imposed some conflicting obligations on professionals, such as the reporting duties of attorneys and physicians, but the result has sometimes been to characterize physicians as quasi-fiduciaries.
144. ERISA § 404, 29 U.S.C. § 1104(a), provides that an ERISA plan fiduciary "shall discharge his duties with respect to a plan solely in the interests of the participants and beneficiaries and - (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; ...." See S. Rep. No. 93-127, at 29 (1973), reprinted in 1974 U.S.C.C.A.N. 4639, 4865 ("The fiduciary responsibility section, in essence, codifies and makes applicable to these fiduciaries certain principles developed in the evolution of the law of trusts."); H.R. Rep. No. 93-533, at 11 (1973); Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 570 (1985).
145. Ehlmann v. Kaiser Foundation Health Plan of Texas, 198 F.3d 552, 556 (5th Cir. 2000).
146. See, e.g., Friend v. Sanwa Bank California, 35 F.3d 466 (9th Cir. 1994) ("nowhere in the statute does ERISA explicitly prohibit a trustee from holding positions of dual loyalties").
147. Schwartz v. Interfaith Medical Center, 715 F. Supp. 1190, 1195 (E.D.N.Y. 1989) (noting that the "'prudent man standard of care' relates primarily to the management of plan assets").
148. Varity Corp. v. Howe, 516 U.S. 489 (1996); Metropolitan Life Insurance Co. v. Taylor, 438 U.S. 58 (1987).
149. Pegram v. Herdrich, 530 U.S. 211, 120 S. Ct. 2143 (2000).
150. A.J. Rosoff, "Breach of Fiduciary Duty Suits Against MCOs: What's Left After Pegram v. Herdrich?," Journal of Legal Medicine, 22 (2001): 55-75. However, several commentators assert that the decision can be used to argue that many patient claims of negligence under state law are not preempted by ERISA § 514.
151. J.W. Stempel and N. von Magdenko, "Doctors, HMOs, ERISA and the Public Interest After Pegram v. Herdrich," Tort & Insurance Law Journal, 36 (2001): 687.
152. 105. 29 U.S.C. § 1109(a).
153. The Court's decision was limited to fiduciary acts pertaining to decisions about health-care benefits. ERISA fiduciaries have other duties, including disclosure, which the Court has recognized in other cases and mentioned in a footnote in Pegram. See Rosoff, supra note 104.
154. Pegram, 530 U.S. at 228.
155. Mariner, supra note 2; Rosoff, supra note 104; Stempel and von Magdenko, supra note 104.
156. The U.S. Supreme Court remanded cases involving state law claims of negligence for reconsideration in light of its decision in Pegram. U.S. Healthcare Systems, PA v. PA Hospital Ins. Co., 530 U.S. 1241 (2000), vacating and remanding Pappas v. Asbel, 724 A.2d 889 (Pa. 1998).
157. Pegram, 530 U.S. at 237.
158. Pappas v. Asbel, 768 A.2d 1089 (Pa. 2001) (confirming its decision at 724 A.2d 889 (Pa. 1998), which was vacated and remanded for reconsideration in light of Pegram).
159. The patient's claims included medical malpractice against the physicians and negligence on the part of Haverford in causing inordinate delay in obtaining a necessary transfer.
160. Pappas v. Asbel, 724 A.2d 889 (Pa. 1998).
161. U.S. Healthcare Systems, PA v. PA Hospital Ins. Co., 530 U.S. 1241 (2000).
162. Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266 (3d Cir. 2001) (see discussion supra in text accompanying note 88).
163. Pryzbowski had undergone "numerous surgeries for her back" and sought treatment in 1993 for back pain from her MCO physicians. They identified an "extra-dural defect compressing the thecal sac, consistent with disc herniation," and concluded that the non-network surgeon, Dr. Barolat, who had done her most recent surgery - to implant a neurostimulator - was the only one who might be able to diagnose or treat the new problem. 245 F.3d at 269. Dr. Barolat insisted on working with other non-network specialists. The treatment was approved and performed seven months later, but Pryzbowski still had back pain. She sued her MCO and its physicians, claiming that the delay in authorizing the surgery had caused her continuing pain. Her claims against the MCO included negligent, arbitrary, and capricious delay; breach of contract; bad faith; and breach of a duty to screen, hire, and train competent employees as decision-makers.
164. Dr. Barolat, who performed the surgery, said that the delay caused the persistent pain, but his opinion might be discounted by a court or jury.
165. Havighurst, supra note 26, at 1392.
166. M. Galanter and M. Cahill, "'Most Cases Settle': Judicial Promotion and Regulation of Settlements," Stanford Law Review, 46 (1994): 1339-91;
167. B. Fromm, "Bringing Settlement Out of the Shadows: Information about Settlement in an Age of Confidentiality," UCLA Law Review, 48 (2001): 663-741.
168. See, e.g., Pryzbowski v. U.S. Healthcare, Inc., 245 F.3d 266 ("It is for Congress and not the courts to decide whether it is sound policy for our health care system to limit or channel the relief available or whether ERISA should allow for broader remedies for beneficiaries in the world of managed care."); Andrews-Clarke v. Travelers Insurance Co., 984 F. Supp. 49 (D. Mass. 1997).
169. See, e.g., Bipartisan Consensus Managed Care Improvement Act, H.R. 2723, passed by the U.S. House of Representatives on October 7, 1999; S. 889 (introduced by Senators Frist, Breaux, and Jeffords) and S. 283 (introduced by Senators McCain, Kennedy, Chafee, and Graham), both named the Bipartisan Patient Protection Act of 2001, 107th Congress, 1st Session, which were superseded by the Senate and House bills passed in the summer of 2001. See discussion of current bill infra in text accompanying note 131.
170. See K.A. Jordan, "Coverage Denials in ERISA Plans: Assessing the Federal Legislative Solution," Missouri Law Review, 65 (2000): 405-72.
171. 65 Fed. Reg. 70,245 (November 21, 2000).
172. Kaiser Family Foundation/Harvard School of Public Health, Update on Americans' Views on the Consumer Protections Debate, Publication No. 1502 (Washington, D.C.: The Henry J. Kaiser Family Foundation, 1999).
173. Corporate Health Insurance, Inc. v. Texas Dept. of Insurance, 215 F.3d 526 (5th Cir. 2000), petition for cert. filed (October 24, 2000) (finding that ERISA preempted state statute requiring independent review of benefit decisions, but not of medical treatment decisions); Moran v. Rush Prudential HMO, Inc., 230 F.3d 959 (11th Cir. 2000), cert. granted, 121 S. Ct. 2589 (2001) (finding that a state statute requiring independent review of medical necessity disputes affected benefit determinations but was saved from preemption as applied to fully insured MCOs offering benefits as part of a fully insured ERISA plan).
174. For example, several district courts have found that a state law bad faith claim was saved from ERISA preemption under § 514(b)(2)(A), 29 U.S.C. § 1144(b)(2)(A), because it was a state law that regulated insurance. Gilbert v. Alta Health & Life Insurance Company, 122 F. Supp. 2d 1267 (N.D. Ala. 2000) (the Alabama common law tort duty of good faith in determining insurance benefits was codified in its insurance code and limited to insurance entities; the plaintiff sued his employer-provided health insurer for denying his claim for coverage of his hospital care); Hill v. Blue Cross Blue Shield of Alabama, 117 F. Supp. 2d 1209 (N.D. Ala. 2000) (distinguishing Pilot Life on the grounds that Mississippi's bad faith tort law was not limited to the insurance industry); Lewis v. Aetna U.S. Healthcare, 78 F. Supp. 2d 1202 (N.D. Okla. 1999). However, other district courts, often with little analysis of the facts, have found state law bad faith claims for denial of benefits to be completely preempted because they fell within the scope of ERISA § 510(a). Ginsberg v. Independent Blue Cross and QCC Insurance Company, No. 01-66, 2001 U.S. Dist. LEXIS 2845 (E.D. Pa. 2001); Richardson v. American Nonwovens Corporation, No. 1:99CV-372-B-A, 2000 U.S. Dist. LEXIS 8515 (N.D. Miss. 2000).
175. The Court remanded Pryzbowski's claims against her HMO physicians to the district court for a determination on whether under New Jersey law physicians have a duty to the patient that they did not meet. The Court did decide that physicians do not currently have a legal duty to advocate on patients' behalf when an MCO delays or denies treatment recommended by the physician, although it took no position on whether the state should impose such a duty in the future. See W.M. Sage, "Physicians as Advocates," Houston Law Review 35 (1999): 1529-630 (suggesting that physician advocacy for managed care benefits would entail changes in their roles and applicable law that could be excessive or counterproductive).
176. See Havighurst, supra note 2 (recommending that MCOs assume vicarious liability, with the option to shift liability downstream to physicians where providers are at fault).
177. But see Bovbjerg, "Summary of Testimony," supra note 65 (arguing that the fear of liability may discourage physicians from reporting errors).
178. S. 1052 passed June 29, 2001. H.R. 2563 passed August 2, 2001.
179. The bills also include a variety of consumer protection provisions, including standards for benefits offered by health insurance and managed care plans, disclosure of information to patients, and procedures for internal and independent external review of benefit decisions. For a comparison of the liability provisions in both bills, see Patient Rights Program White Paper: Different Systems of Liability to Patients - Comparative Analysis of the Senate and House of Representative Bills Entitled "Bipartisan Patient Protection Act" (S. 1052 and H.R. 2563) Provisions on Liability to Patients (Boston: Boston University School of Public Health, Health Law Department, Patient Rights Program, September 7, 2001) (monograph available from the Patient Rights Program).
180. Congressman Charles Norwood, a key sponsor of the original House bill, agreed with President Bush to amend H.R. 2563 in ways that the President, who had not supported its liability provisions, would accept. Several of Norwood's co-sponsors objected to Norwood's apparently unilateral action.
181. S. 1052 § 402(a)(1) (adding new § 502(n)(17) to ERISA) and § 402(b)(2) (adding new subsection (d)(1)(A) to ERISA § 514).
182. S. 1052 § 402(a)(1) (adding new § 502(n) to ERISA).
183. S. 1052 § 104(d)(2).
184. H.R. 2563 § 402 (adding new § 502(n) to ERISA).
185. The House bill does not make clear whether a health plan's decision to use a different treatment or provider than what the patient wants would be considered to be a benefit denial under the new liability provisions. If not, then patients would not have any right to recover compensation if they were injured as a result of a health plan's wrongful refusal to authorize a particular treatment or provider. The Senate bill contains a similar ambiguity that makes it difficult to determine whether federal or state law would apply, but it ensures patients a cause of action either way.
186. H.R. 2563 § 402 (adding new § 502(n)(9) to ERISA) ("A cause of action that is based on or otherwise relates to a group health plan's determination on a claim for benefits shall not be deemed to be the delivery of medical care under any State law....").
187. The House bill creates a cause of action against a designated decision-maker who "fails to exercise ordinary care" in making a determination denying a claim for benefits or failing to authorize benefits in compliance with the written determination of an independent medical review where the failure to receive or any delay in receiving benefits is a proximate cause of personal injury or death. H.R. 2563 § 402(a) (adding a new § 502(n)(1) to ERISA). "The term Ordinary care' means, with respect to a determination on a claim for benefits, that degree of care, skill, and diligence that a reasonable and prudent individual would exercise in making a fair determination on a claim for benefits of like kind to the claims involved." H.R. 2563 § 402(a) (adding a new § 502(n)(16)(E) to ERISA).
188. Although the House bill gives state courts concurrent jurisdiction over such claims, the new ERISA § 502(n) - federal law - would apply.
189. R. Fein, Medical Care, Medical Costs - The Search for an Insurance Policy (Cambridge: Harvard University Press, 1986).
190. K.R. Wing, "Health Care Reform in the Year 2000: The View from the Front of the Classroom," American Journal of Law & Medicine, 26 (2000): 277-93.
191. J. Gordley, "The Common Law in the Twentieth Century: Some Unfinished Business," California Law Review, 88 (2000): 1815-75 (arguing for governance by fundamental principles rather than specific rules).
192. The complexity is likely to multiply as the responsibilities of employers, insurers, and managed care organizations that administer self-funded ERISA plans, utilization review companies, and other subcontractors are sorted out.
193. G.J. Annas, "Patients' Rights in Managed Care - Exit, Voice, and Choice," N. Engl. J. Med., 337 (1997): 210-15.
194. "Here, more than anywhere else in the world, the daily panorama of human existence - the unending procession of governmental extortions and chicaneries, of commercial brigandages and throat-slitting, of theological buffooneries, of aesthetic ribaldries, of legal swindles and harlotries - is so inordinately extravagant, so perfectly brought up to the highest conceivable amperage, that only the man who was born with a petrified diaphragm can fail to go to bed every night grinning from ear to ear and awake every morning with the eager, unflagging expectations of a Sunday school superintendent touring the Paris peep-shows." H.L. Mencken, "On Being an American," Prejudices: Third Series (New York: Knopf, 1922).