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Health Law Keyed to Furrow
Aetna Health, Inc. v. Davila
Facts
Ruby R. Calad (Plaintiff) and Juan Davila (Plaintiff) were among four HMO subscribers who sued their HMOs (Defendant) claiming the HMOs violated Texas law by denying or delaying their receipt of health benefits. Calad (Plaintiff), who was a beneficiary of a health plan offered by CIGNA HealthCare of Texas, Inc. (CIGNA) (Defendant), had a hysterectomy, and CIGNA (Defendant) approved coverage for a one-day only hospital stay, in spite of Calad's (Plaintiff) doctor's recommendation that she say longer. After Calad (Plaintiff) suffered complications causing her to go back to the hospital a few days after her release, she sued CIGNA (Defendant) in a Texas state court under the Texas Health Care Liability Act (THCLA). CIGNA (Defendant) removed the case to federal court as preempted by ERISA, and the federal court dismissed Calad's (Plaintiff) claims as preempted by ERISA. Davila (Plaintiff) was insured through Aetna Health Inc. (Defendant). His doctor prescribed the drug Vioxx for Davila's (Plaintiff) arthritis pain, but Aetna (Defendant) required that Davila (Plaintiff) enter its "step program," under which Davila (Plaintiff) would try a less expensive drug before trying Vioxx. Davila (Plaintiff) began taking the less expensive drug and three weeks later he was rushed to the emergency room where he was diagnosed with a bleeding ulcer. Davila (Plaintiff) brought suit against Aetna Defendant claiming it violated the THCLA. The Texas federal court found his claim also was preempted by ERISA. The U.S. Court of Appeals for the Fifth Circuit combined their cases and found that the HMOs (Defendant) were not acting as plan fiduciaries when they denied medical care, and that ERISA § 502(a)(2) did not completely preempt the THCLA claims. Section 502(a)(2) allows plan participants or beneficiaries to sue for "appropriate relief" for fiduciary breach. The Fifth Circuit relied on the decision of the U.S. Supreme Court in Pegram v. Herdrich, 530 U.S. 211 (2000), in which the Court found that mixed eligibility and treatment decisions HMO's make are not subject to ERISA § 502(a)(2) because such decisions are not fiduciary acts. Aetna (Defendant) and CIGNA (Defendant) filed separate motions seeking the Supreme Court's review of the Fifth Circuit's ruling.
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