Groundbreaking NJ case against HMO proceeds amid efforts to rein in HMOs

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The Associated Press

The couple who helped end drive-through deliveries after their 2-day-old daughter died are on a new crusade – this time to hold HMOs accountable for their medical decisions.

Steve and Michelle Bauman, formerly of Williamstown in rural southern New Jersey, hope to pierce the shield of a federal law that has protected health maintenance organizations from lawsuits by patients who were harmed by the denial, delay or poor quality of care.

The couple are suing Aetna U.S. Healthcare, claiming its former policy of discharging newborns after 24 hours led to the death of their first baby, Michelina, a day after she was sent home in May 1995.

Their testimony to Congress and the New Jersey Legislature, detailing Michelina’s death from an infection that would have been detected in the hospital, led to a federal law and many state laws requiring a minimum 48-hour stay for newborns and their mothers.

Now the Baumans are trying to win financial damages from Aetna U.S. Healthcare. In a precedent-setting ruling last June, the U.S. Supreme Court upheld a federal appeals court ruling that the couple can sue the HMO for malpractice in state court.

“The ultimate thing we’re looking for is … making it safer for other newborns and their mothers,” Steve Bauman said Thursday in an interview at their attorney’s Cherry Hill office. “Somebody’s got to be held accountable so they know they can’t get away with this anymore.”

Other patients, doctors and politicians are pursuing different strategies with the same goal. Those efforts include pending federal class-action lawsuits attacking the way HMOs manage care, and attempts to pass federal and state laws giving at least 125 million patients the right to sue HMOs.

The House passed a Patients Bill of Rights this year, but it failed in the Senate by one vote. John Stone, spokesman for the House sponsor, Rep. Charlie Norwood, R-Ga., predicts the bill will pass early in the next Congress because more Republican senators now back it.

Seven states have passed such laws since 1997 and another 27 debated them this year, according to Molly Stauffer of the National Conference of State Legislatures. Many bills died or were withdrawn, but will be reintroduced in January, she said.

In New Jersey, a bill allowing lawsuits against HMOs passed the state Senate 38-0 but is tied up in the Assembly.

The American Medical Association, its state affiliates and many consumer groups have lobbied hard for such laws, while HMOs and the Health Benefits Coalition, representing 3 million U.S. employers, oppose them.

“What you’re looking at is something that’s going to drive up coverage costs, encourage defensive medicine, do nothing to improve the quality of care and benefit trial lawyers more than anyone else,” said Susan Pisano, spokeswoman for the American Association of Health Plans.

However, in Texas, where the first such law was enacted, only a handful of malpractice suits have been filed.

It’s too early to know the full impact of those laws, said Jamie Court, executive director of the watchdog group Foundation for Taxpayer and Consumer Rights, but he hopes they will “put some fear into HMOs.”

Late last month, the Baumans, who live in Spring Hill, Fla., with their young daughter Alanna and son Steven, came to New Jersey to give depositions in preparation for a trial next summer. They say the HMO nurse who was to visit the baby the day after discharge never came, and their pediatrician told them not to worry about the baby’s moaning, strange rash and other symptoms.

Aetna U.S. Healthcare said it has no legal liability because all care decisions were made by the couple’s doctor, who also is a defendant.

Until now, HMOs routinely got state malpractice lawsuits moved to federal courts, where at most plaintiffs can recover the cost of care denied them.

That’s because the 1974 Employee Retirement Income Security Act, or ERISA, was interpreted in early court rulings to exempt all HMO plans sponsored by private employers from lawsuits claiming harm from denial of care. ERISA was meant to guarantee that employees get the benefits employers promise them.

“Our case is one of the few cases, and the only one that’s gone through a federal appeals court, where we’re challenging HMO policies that cause malpractice to occur,” said Josh Spielberg, the Baumans’ lawyer. “It has already, I think, opened up (the way for) more of these cases.”

Federal courts have consistently ruled that lawsuits against HMOs over denial of coverage for a treatment are barred by ERISA. Now patients’ lawyers are arguing that HMOs provided substandard medical care, because those cases are governed by state laws.

Even without the new patient protection laws, some state courts have allowed HMO malpractice lawsuits on certain issues, as with the Baumans’ case.

Meanwhile, the Baumans tell their children about their sister “up in heaven,” whose hospital photo hangs in their dining room. They tell the children Michelina was very sick, but just last Thursday 4

Now a New Jersey jury will decide that question.

On the Net: Foundation for Taxpayer and Consumer Rights site:

Health Benefits Coalition site:

National Conference of State Legislatures managed care site:

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