The roles of ethicists in managed care litigation

Journal of Law, Medicine and Ethics

Volumn 33, Issue 2, 2005, Pages 264-273

  Majumder, Mary Anderlik ^a  

^a BAYLOR COLLEGE OF MEDICINE   (United States)

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EID: 23944482435     PISSN: 10731105     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1748-720X.2005.tb00492.x     Document Type: Conference Paper

References (56)

1. E. J. Imwinkelried, "Expert Testimony by Ethicists: What Should be the Norm?" Journal of Law, Medicine & Ethics 33, no. 2 (2005): 198-221.
2. "Managed care organization" is also a slippery term. In the contemporary situation, there are very few health insurers that refrain from any involvement in the delivery of care. Still, some insurers are more involved than others. In 1992, John Iglehart defined a managed care system as one that integrates the financing and delivery of medical care by means of the following features: "contracts with selected physicians and hospitals that furnish a comprehensive set of health care services to enrolled members, usually for a predetermined, monthly premium; utilization and quality controls that contracting providers agree to accept; financial incentives for patients to use the providers and facilities associated with the plan; and the assumption of some financial risk by doctors, thus fundamentally altering their role from serving as agent for the patient's welfare to balancing the patient's needs against the need for cost control." J. K. Iglehart, "Managed Care," N. Engl. J. Med. 327 (1992): 742-747.
3. 29 U.S.C. §§ 1001-1461.
4. 18 U.S.C. §§ 1961-1968.
5. Humana Health Insurance Company of Florida, Inc. v. Chipps, 802 So.2d 492 (Fla. Ct. App. 2001).
6. The amount of punitive damages matched the amount Humana allegedly sought to save by cutting Caitlyn and other catastrophically ill children from the case management program.
7. The primary reason for the reversal was a pleading error on the part of the plaintiffs. Humana argued that the plaintiffs' complaint never clearly alleged that damages were due Caitlyn for intentional infliction of emotional distress. If this was true, and the appeals court agreed that it was, then compensatory damages should not have been awarded to Caitlyn. Further, evidence concerning Caitlyn's distress should not have been admitted, with possible implications for the large punitive damages award. The appeals court also found that the trial court erred in its rulings on certain evidentiary matters. Chipps, supra note 5. The case was ultimately settled for $2 million. See E. Amon, "$79M Managed Care Suit Settles for $2M," National Law Journal, February 11, 2002, A4.
8. Fed. R. Evid. 702.
9. B. Spielman and G. Agich, "The Future of Bioethics Testimony: Guidelines for Determining Qualifications, Reliability, and Helpfulness," San Diego Law Review 36 (1999): 1044-75, at 1051.
10. In re Diet Drugs Products Liability Litigation, 2001 U.S. Dist. LEXIS 1174 (E.D. Pa. 2001).
11. For a more extensive analysis of the Diet Drugs ruling, see B. J. Spielman, "Professionalism in Forensic Bioethics," Journal of Law, Medicine & Ethics 30, no. 3 (2002): 420-433, at 422-23, 424.
12. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
13. Direct Examination of Dr. Linda Peeno, Transcript of Chipps v. Humana Health Insurance Company of Florida, Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida, Civil Division, Case No. CL 96-00423 AE, Jury Trial before the Hon. James T. Carlisle (December 8, 1999-January 4, 2000) ("Chipps trial transcript"), Vol. 10, at TR 1605, available at 〈www.best evidence.com/Clips/PDF-Hum/T10.pdf〉 (last visited March 28, 2005).
14. Cross Examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 11, at TR 1796-1797, available at 〈www.bestevidence.com/ Clips/PDF-Hum/T11. pdf〉 (last visited March 28, 2005).
15. Id. at TR 1798.
16. Id. at TR 1791-1792.
17. Fed. R. Evid. 702; Spielman and Agich, supra note 9, at 1065.
18. G. B. Agrawal and M. A. Hall, "What If You Could Sue Your HMO? Managed Care Liability Beyond the ERISA Shield," St. Louis Law Journal 47 (2003): 235-298, at 290.
19. Id. at 292. Agrawal and Hall comment that relevant evidence would include standards of practice drawn from regulatory and accreditation sources. E. Haavi Morreim also gravitates toward a process standard that may set the bar higher than industry custom in some circumstances.
20. See E. H. Morreim, Holding Health Care Accountable: Law and the New Medical Marketplace (New York: Oxford University Press, 2001): at 119-120.
21. The appeals court ruled that the trial court "improperly prevented Humana from introducing mitigating evidence to rebut testimony that Humana's managed care practices violated industry standards." This testimony "reflected on the egregiousness of Humana's conduct, and, thus, may have impacted the amount of damages the jury awarded." Chipps, supra note 5, at 496. The Humana attorneys did get in testimony such as the following: "Q. The operation by Humana of an incentive bonus program - in this case it's only been discussed in connection with the reduction of unnecessary medical bed days, hospital bed days - the operation of such a program is in line with industry standards? A. Yes, sir....Q. Is the operation, Doctor, based on your experience, education, and background, of an incentive bonus program that comports with industry standards an ethical practice? A. Yes, sir." Direct Examination of Dr. Michael Henderson, Chipps trial transcript, Vol. 20, TR 3404-3405, available at 〈www.bestevidence.com/Clips/PDF-Hum/T20.pdf〉.
22. Heinrich v. Sweet, where the issue was the viability of a negligence theory in connection with an experimental treatment, boron neutron capture therapy, for terminal brain cancer. Heinrich v. Sweet, 308 F.3d 48 (1st Cir. 2002), cert. denied, Heinrich v. Sweet, 2003 U.S. LEXIS 4433 (June 9, 2003).
23. Regarding informed consent, the court in In re Diet Drugs stated that the standard was "legal," i.e., relevant testimony would concern the legal standard of informed consent as defined within each applicable jurisdiction. In re Diet Drugs, supra note 10, at 28-29.
24. Id. at 29-30. Testimony from an expert should not be admitted if the trier of fact is equally competent to draw the inference in question. See Imwinkelried, supra note 1, at 108-9.
25. State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 423 (2003). However, were the attorney for a defendant to put character at issue by introducing evidence that the client is a good corporate citizen, the door would be open for the plaintiff's attorney to introduce rebuttal evidence on this point.
26. See Spielman and Agich, supra note 9, at 1057-64; Spielman, supra note 10, at 421-22, 424-25; Imwinkelried, supra note 1, at 100.
27. In re Diet Drugs, supra note 10, at 31.
28. Cross Examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 11, TR1824-1830.
29. In the vivid phrase coined by E. Haavi Morreim, bioethicists are "intellectual cross dressers." E. H. Morreim, "At the Intersection of Medicine, Law, Economics, and Ethics: Bioethics and the Art of Intellectual Cross-Dressing," in R. A. Carson and C. R. Burns, eds., Philosophy of Medicine and Bioethics (Dordrecht, Germany: Kluwer Academic Publishers, 1997): at 300.
30. For example, the expert should specify how opinions were derived, e.g., from personal experience, a synthesis of the peer-reviewed or other literature or particular sources, or generally accepted professional opinion in the field (and how this was ascertained). See B. J. Spielman, supra note 10, at 425.
31. See E. H. Morreim, "Confusion in the Courts: Managed Care Financial Structures and Their Impact on Medical Care," Tort & Insurance Law Journal 35 (2000): 699-728.
32. Direct Examination of Dr. Michael Henderson, Chipps trial transcript, Vol. 20, TR 3402-3403.
33. The direct examination included the following exchange concerning Humana's medical case management policy and procedures manual, and particularly the provisions concerning the closure phase where a decision is made to move someone from case management to regular benefits: Q. From an ethics standpoint, from a medical ethics standpoint, what's the importance of...ascertaining goals, speaking to treating doctors, physician advisors' involvement? A. [F]irst of all, it's the appropriate thing to do medically. I mean, you've got, you know, some of the sickest patients in the plan, so you want to make sure that you make appropriate clinical decisions about what's going to happen to them, because you're going to affect their life and well being. From a business ethics standpoint,...if you make a certain promise to a patient or a member, you actually extend benefits like you do under case management, and if you don't go through the proper procedures to ensure that those benefits are achieved and policies and procedures [are followed], you know, that amounts to breaking promises and misrepresenting something to your consumer. Direct Examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 10, TR 1632-1633.
34. In Peeno's case, the defense attorney tried to create the impression that the plaintiff's attorney might have shared only a subset of the documents produced through discovery, a subset selected to advance his client's interests: Q. Everything you know about this case comes from documents selected by Ted Leopold to provide to you, or things that he told you, correct? A. Well, provided by your client, yes. Q. And then he goes through it and he decides what to send you; isn't that right? A. Well, I don't know if there's been a selection process. I think everything that has been produced has been provided to me. Q. Did he send you everything? I want to know if that's your testimony, he sent you everything? A. I'm assuming he has. Cross Examination of Dr. Linda Peeno, Chipps trial transcript, TR 1771-1772. The interesting twist, of course, was that Humana was severely sanctioned for discovery violations. See also Henderson cross-examination, Chipps trial transcript, Vol. 21, TR 3434, available at 〈www.bestevidence.com/Clips/PDF-Hum/T21.pdf.〉
35. The appeals court faulted the trial judge for characterizing Humana's conduct in these terms in its instruction to the jury versus leaving it to the jury to determine the egregiousness of Humana's conduct. The appeals court also suggested that the trial court favor slightly less colorful language in instructing the jury on punitive damages in the future. Chipps, supra note 5, at 496.
36. Peeno testified that this was true at the macro level, in terms of decisions about what programs to establish or emphasize, and also at the micro or individual patient level, with decisions related to the children terminated from case management. So, for example, as to the latter: "Q. Did you ever see anywhere in the documents, any of the depositions, where there was ever a consideration, a discussion, about what would happen to the catastrophically-ill child that was terminated from the medical case management when they went back on the regular plan? A. No. I mean absolutely nothing where anybody expressed any kind of concern about the consequences of these sort of decisions to these extremely vulnerable little kids." Direct Examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 10, TR 1671-1672. Also: "A. It is unethical to create a program to focus on savings, to create a chart where your goal is to produce 78 and a half million dollars of savings and to have nothing, absolutely nothing in any of those reports that we looked at that talked about quality of care, or outcome, or specific consequences to the individual patients whose lives are going to be saved [sic] in order to produce that savings. That's unethical." Re-direct of Dr. Linda Peeno, Chipps trial transcript, Vol. 11, TR 1818.
37. Cross examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 11, TR 1794-1794.
38. Cross Examination of Dr. Linda Peeno, Chipps trial transcript, Vol. 11, TR 1814-1815.
39. 530 U.S. 211 (2000).
40. Brief of Health Law, Policy, and Ethics Scholars as Amici Curiae in Support of Respondent, 1998 U.S. Briefs 1949 (December 20, 1999) (LEXIS). The amici were M. Gregg Bloche, Peter P. Budetti, Norman Daniels, Carola Eisenberg, Leslie Pickering Francis, Eliot Freidson, Ruth D. Gaare, Eli Ginzburg, Lawrence O. Gostin, Eugene C. Grochowski, Michael A. Grodin, Alan L. Hillman, Joel D. Howell, Patricia Illingsworth, Peter D. Jacobson, Timothy Stoltzfus Jost, Jeffrey P. Kahn, Sheldon F. Kurtz, Wendy K. Mariner, Thomas Wm. Mayo, Jonathan D. Moreno, Thomas R. Oliver, Edmund D. Pellegrino, Mark A. Peterson, Thomas Rice, John A. Robertson, Marc A. Rodwin, Marjorie M. Shultz, Andrew W. Siegel, Anita Silvers, Roy G. Spece, Jr., Alan A. Stone, Richard Scott Stuart, Walter Wadlington, and Susan M. Wolf.
41. Id. at 1-2.
42. Id. at 2.
43. Id. at 3.
44. Id. at 4.
45. Id. at 14-15.
46. In most circumstances, these articles will be culled from the literature available through LEXIS or Westlaw. These databases include journals that bridge law and ethics (e.g., the Journal of Law, Medicine & Ethics, the Yale Journal of Health Policy, Law, and Ethics), but not core bioethics journals (e.g., the Hastings Center Report, the Kennedy Institute of Ethics Journal). However, the American Journal of Bioethics is available through the Health News and Information source file in LEXIS/NEXIS.
47. 154 F.3d 362 (7th Cir. 1998).
48. Id. at 375
49. (quoting from J. Greene, Has Managed Care Lost Its Soul? Health Maintenance Organizations Focus More on Finances, Less on Care, Am. Hosp. Publishing Inc., May 20, 1997.)
50. In a more conventional dissent, Judge Flaum cited a number of articles authored by scholars that straddle the law-ethics divide, including E. Haavi Morreim, Frances H. Miller, David Orentlicher, and Edward B. Hirshfeld (none of whom, incidentally, signed on to the Brief of Health Law, Policy, and Ethics Scholars).
51. "The adequacy of professional obligation to counter financial self-interest has been challenged no matter what the form of medical organization. HMOs became popular because fee-for-service physicians were thought to be providing unnecessary or useless services; today, many doctors and other observers argue that HMOs often ignore the individual needs of a patient in order to improve the HMOs' bottom lines [citations omitted]. There are, of course, contrary perspectives, and we endorse neither side of the debate today." Pegram v. Herdrich 530 U.S. 211, 220 (2000).
52. Id. at 221.
53. Id. at 233.
54. "While the incentive of the HMO physician is to give treatment sparingly, imposing a fiduciary obligation upon him would not lead to a simple default rule, say, that whenever it is reasonably possible to disagree about treatment options, the physician should treat aggressively. After all, HMOs came into being because some groups of physicians consistently provided more aggressive treatment than others in similar circumstances, with results not perceived as justified by the marginal expense and risk associated with intervention....[W]hether under the Court of Appeals's rule or a straight standard of undivided loyalty, the defense of any HMO would be that its physician did not act out of financial interest but for good medical reasons, the plausibility of which would require reference to standards of reasonable and customary medical practice in like circumstances....Thus, for all practical purposes, every claim of fiduciary breach by an HMO physician making a mixed decision would boil down to a malpractice claim, and the fiduciary standard would be nothing but the malpractice standard traditionally applied in actions against physicians." Id. at 235.
55. Aetna Health Inc. v. Juan Davila, 542 U.S. 200, 124 S.Ct. 2488 (2004).
56. A brief amicus curiae was filed by the American College of Legal Medicine in support of the respondents, and parts of this brief did address normative issues of responsibility and fairness: The phrase, "he who lives in glass houses should not throw stones", has considerable force in this regard. That is to say, HMOs have taken it upon themselves, as part of being in their business, to interject discretionary judgments prospectively made regarding the care and treatment to be provided a patient as part of administering, delivering and providing that care. This decision-making has consequences if it does not meet a standard of applicable care; the quid pro quo for such consequences is, to reiterate, accountability - again to reiterate, the very same accountability imposed upon physicians and others who deliver and provide healthcare by making or contributing to medical decisions. And to camouflage such decisions as simply a denial of a benefit or simply as nothing more than paying a claim, as petitioners and their amici have done, is to avoid the realities of how health care is provided in this country today. If HMOs are the genesis for their own accountability due to the medical decisions their personnel make, it defies logic to then say that a state tort malpractice system will be the culprit for increasing the cost of providing a benefit under a health plan; or, perhaps, are the managed care entities in the cases at bar asserting that they agree to be held as accountable for the same decisions as other health care providers make, but only in a legal venue of their own liking which is not state-based and which provides them with limited exposure? The latter, if true, would cause consumers and health care practitioners alike to align in dramatic revolt against this HMO position; this stance would also prove costly for the legal system since adjudicating accountability for medical decision-making of the same variety would have to be based in two forums: federal for HMOs and state for all others. Brief Amicus Curiae of the American College of Legal Medicine in Support of Respondents, 2002 U.S. Briefs 1845 (January 20, 2004) (LEXIS).