American Journal of Law & Medicine

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ERISA Preemption: Second Circuit Ruling Delivers Potential Blow to HMOs-Cicio v. Does, 321 F.3d 83 (2d Cir. 2003).

Supreme Court: Abortion Protesters Not in Violation of RICO--Scheidler v. National Organization for Women, Inc., 123 S. Ct. 1057 (2003).

ERISA Preemption: Second Circuit Ruling Delivers Potential Blow to HMOs--Cicio v. Does (1)--The U.S. Court of Appeals for the Second Circuit held that an HMO may not claim that the Employment Retirement Income Security Act (ERISA) (2) preempts an allegedly flawed "mixed eligibility and treatment decision" with regard to a beneficiary's symptoms. (3) After the HMO (Vytra), its medical director (Dr. Spears) and eight doctors removed Plaintiff's complaint to federal court, a magistrate dismissed Plaintiff's state law negligence and contract claims finding that ERISA preempted them. Although the Second Circuit agreed that ERISA preempted the Plaintiff's state law timeliness and misrepresentation claims, it reversed the decision with respect to Plaintiff's medical malpractice claim. (4)

Carmine Cicio, the decedent, received healthcare benefits from Vytra, an IPA-HMO, through his employment benefits plan. Cicio suffered from multiple myeloma and was undergoing chemotherapy treatment. Dr. Samuel, Cicio's oncologist, wrote a letter to Vytra on January 28, 1998 seeking approval for a more intensive form of chemotherapy accompanied by peripheral blood stem cell transplantation in a tandem double transplant. In addition to his request, Dr. Samuel provided Vytra with facts about Cicio's medical history and the advantages of the recommended treatment.

Under Cicio's plan--which fit within the definition of an "employee benefit plan" under ERISA (5)--Vytra covered all medically necessary services except for "[a]ny procedure or service which, in the judgment of Vytra's Medical Director, is experimental or is not generally recognized to be effective for a particular condition, diagnosis, or body area." (6) On February 22, 2003, Dr. Spears denied Dr. Samuel's request, finding the procedure experimental and investigational.

Dr. Samuel wrote back to Dr. Spears on March 4, 1998, explaining the advantages and proven results of the treatment. Dr. Samuel noted that single transplants are also effective, but maintained that a tandem transplant would be the most useful procedure for Cicio. Three weeks later, on March 25, 1998, Dr. Spears replied to Dr. Samuel and, relying on clinical peer review, rejected the tandem stem cell transplant. Dr. Spears, however, approved the more moderate single stem cell transplant procedure. Unfortunately, by the time Dr. Spears approved the treatment, Cicio was no longer a transplant candidate. He died less than two months later.

Appellant, Bonnie Cicio (Carmine's widow), sued Appellees Vytra, Dr. Spears and eight unknown doctors in New York state court on eighteen counts of negligence and breach of contract claims. Appellees successfully removed the case to federal court and subsequently moved to dismiss Appellant's claims. A magistrate found that federal jurisdiction existed over Appellant's claims. (7) He subsequently dismissed the claims, finding that they sought to enforce an employee benefit plan and were therefore preempted under sections 502(a) and 514 of ERISA. …

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