A Rare HMO Lawsuit

Here's something you almost never see. Teri Goodrich is suing an HMO, Aetna, and the case is going to trial in California. Since most HMOs are exempt from state lawsuits, this is rare, reports CBS News Correspondent Wyatt Andrews.

"I've got to try to do what I can to make the insurance companies treat people better," says Goodrich.

Teri Goodrich is suing Aetna, now the country's largest HMO, for not paying all the bills, more than half-a-million dollars worth, when her husband David died of stomach cancer. She bitterly recalls the day one of Aetna's letters arrived at David's bedside.

"And he was in critical care on the respirator," she remembers. "We received a certified letter from Aetna which said if you choose to remain in the hospital you'll be responsible, you know, for the charges. It doesn't make any sense that they should be able to do pretty much what they want without people being able to fight in any way."

The case could be close. Aetna says it paid for much of Goodrich's care, and denied only what his policy didn't cover.

But the dispute according to Goodrich's lawyer, Mike Bidart, says the company intentionally stalled David's treatment, figuring he was dying anyway.

"So five and half months elapsed from the time he collapsed in court until he got a denial. Unfortunately for David Goodrich, his cancer had already metasticized, or moved to his liver," says Bidart.

What makes this case unusual is that Teri Goodrich is allowed to file suit only because her husband worked for the government.

For most any other employee, Congress has banned any state lawsuit against companies that provide worker benefits. When that law passed back in the 70's, Congress never realized that HMOs could one day use that law as a shield.

"I think they see themselves in a permanent legal immunity situation that allows them to make these callous decisions without having to pay the price," says Senate Minority Leader Tom Daschle.

Daschle says the right to sue is the leading reform in an HMO package he'll introduce next month. "You don't have real meaningful HMO reform unless you hold these companies accountable," he says.

Karen Ignangi says that is not the right remedy. Ignangi represents HMO's and warns lawsuits will only benefit trial lawyers, and do nothing to improve treatment.

"If your goal is to improve patient trust and confidence, you don't get there from laying down a right to sue," argues Ignangi.

To HMOs, managing cases like David's is the manage in managed care. Immunity from lawsuits protects that power. And now, one rare lawsuit charges they've abused that power and won't stop until they pay.
  • CBSNews.com staff CBSNews.com staff

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