Opinion ID: 4941
Heading Depth: 2
Heading Rank: 1

Heading: The Nature of the Corcorans' State Law Claims

Text: The Corcorans' original petition in state court alleged that acts of negligence committed by Blue Cross and United caused the 10 death of their unborn child. Specifically, they alleged that Blue Cross wrongfully denied appropriate medical care, failed adequately to oversee the medical decisions of United, and failed to provide United with Mrs. Corcoran's complete medical background. They alleged that United wrongfully denied the medical care recommended by Dr. Collins and wrongfully determined that home nursing care was adequate for her condition. It is evident that the Corcorans no longer pursue any theory of recovery against Blue Cross. Although they mention in their appellate brief the fact that they asserted a claim against Blue Cross, they challenge only the district court's conclusion that ERISA pre-empts their state law cause of action against United.6 We, therefore, analyze solely the question of pre-emption of the claims against United. See Hulsey v. State of Texas, 929 F.2d 168, 172 (5th Cir. 1991) (issues stated but not briefed need not be considered on appeal). The claims against United arise from a relatively recent phenomenon in the health care delivery system -- the prospective review by a third party of the necessity of medical care. Systems of prospective and concurrent review, rather than traditional retrospective review, were widely adopted throughout the 1980s as a method of containing the rapidly rising costs of health care. Blum, supra, at 192; Furrow, Medical Malpractice and Cost Containment: Tightening the Screws, 36 Case Western L. 6 They also do not mention Blue Cross when arguing that extracontractual damages are available under § 502(a)(3). 11 Rev. 985, 986-87 (1986). Under the traditional retrospective system (also commonly known as the fee-for-service system), the patient obtained medical treatment and the insurer reviewed the provider's claims for payment to determine whether they were covered under the plan. Denial of a claim meant that the cost of treatment was absorbed by an entity other than the one designed to spread the risk of medical costs -- the insurer. Congress's adoption in 1983 of a system under which hospitals are reimbursed for services provided to Medicare patients based upon average cost calculations for patients with particular diagnoses spurred private insurers to institute similar programs in which prospective decisions are made about the appropriate level of care. Although plans vary, the typical prospective review system requires some form of pre-admission certification by a third party (e.g., the HMO if an HMOassociated doctor provides care; an outside organization such as United if an independent physician provides care) before a hospital stay. Concurrent review involves the monitoring of a hospital stay to determine its continuing appropriateness. See generally, Blum, supra, at 192-93; Tiano, The Legal Implications of HMO Cost Containment Measures, 14 Seton Hall Legis. J. 79, 80 (1990). As the SPD makes clear, United performs this sort of prospective and concurrent review (generically, utilization review) in connection with, inter alia, the hospitalization of Bell employees. 12 The Corcorans based their action against United on Article 2315 of the Louisiana Civil Code, which provides that [e]very act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. Article 2315 provides parents with a cause of action for the wrongful death of their unborn children, Danos v. St. Pierre, 402 So. 2d 633, 637-38 (La. 1981), and also places liability on health care providers when they fail to live up to the applicable standard of care. Chivleatto v. Divinity, 379 So. 2d 784, 786 (La. Ct. App. 4th Dist. 1979). Whether Article 2315 permits a negligence suit against a third party provider of utilization review services, however, has yet to be decided by the Louisiana courts. The potential for imposing liability on these entities is only beginning to be explored, with only one state explicitly permitting a suit based on a utilization review company's allegedly negligent decision about medical care to go forward. Wilson v. Blue Cross of So. California, 22 Cal. App. 3d 660, 271 Cal. Rptr. 876, 883 (1990) (reversing summary judgment for utilization review company which determined that further hospitalization was not necessary; ERISA not implicated);7 see also Wickline v. State of California, 192 Cal. App. 3d 1630, 239 Cal. Rptr. 810, 819 (1986) (stating, in dicta, that negligent implementation of cost containment mechanisms such as utilization 7 The case went to trial, but the plaintiff settled with Western Medical, the provider of utilization review services. See Milt Freudenheim, When Treatment and Costs Collide, N.Y. Times, Apr. 28, 1992, at C2 col. 1. 13 review can lead to liability; ERISA not implicated), cert. granted, 727 P.2d 753, 231 Cal. Rptr. 560, review dismissed, cause remanded, 741 P.2d 613, 239 Cal. Rptr. 805 (1987).8 In the absence of clear Louisiana authority for their lawsuit, the Corcorans rely on Green v. Walker, 910 F.2d 291 (5th Cir. 1990). We held in Green that Article 2315 imposes a duty of due care upon physicians hired by employers to conduct employment-related exams on employees. Id. at 296. The cause of action recognized in Green, however, is not analogous to the 8 Numerous commentators have weighed in on the propriety of liability for utilization review decisions. See e.g., Macaulay, Health Care Cost Containment and Medical Malpractice: On a Collision Course, 19 Suffolk U.L. Rev. 91, 106-107 (1986) (arguing for higher standard of negligence in Wickline suits); Morreim, Cost Containment and the Standard of Medical Care, 75 Calif. L. Rev. 1719, 1749-50 (1987) (arguing that liability should be limited because patient's physician makes the ultimate decision about treatment); Note, Paying the Piper: Third Party Payor Liability for Medical Treatment Decisions, 25 Ga. L. Rev. 861, 907-911 (1991) (by David Griner) (arguing that without liability for negligence in utilization review decisions, third party payors have incentives to control costs but not to use reasonable care in the decisionmaking process); Mellas, Adapting the Judicial Approach to Medical Malpractice Claims Against Physicians to Reflect Medicare Cost Containment Measures, 62 U. Colo. L. Rev. 287, 316 (1991) (liability will reduce possibility that poor medical decisions will be made in order to cut costs). Even if courts put their imprimatur on negligence actions against utilization review organizations, plaintiffs would face difficulties in proving that the organization's decision was a significant cause of an injury. See Wickline, 239 Cal. Rptr. at 819 (decision of doctor to discharge patient after Medi-Cal (state utilization review body) would not authorize additional hospital stay, not decision of Medi-Cal on appropriate length of stay, is act upon which liability should be premised); Note, supra, 25 Ga. L. Rev. at 902-05 (discussing problem of proving that utilization review organization's decision is proximate cause of injury); but see Wilson, 271 Cal. Rptr. at 883 (finding that plaintiffs had adduced enough evidence as to causal effect of utilization review company's decision on decedent's suicide to avoid summary judgment). 14 cause of action brought against United because Green involved an actual physical examination by a doctor hired by an employer, not the detached decision of a utilization review company. Despite the lack of clear Louisiana authority supporting the Corcorans' theory of recovery against United, we can resolve the pre-emption question presented in this appeal. The law in this area is only beginning to develop, and it does not appear to us that Louisiana law clearly forecloses the possibility of recovery against United. Thus, assuming that on these facts the Corcorans might be capable of stating a cause of action for malpractice,9 our task now is to determine whether such a cause of action is preempted by ERISA.