Reply #4: ERISA

[dr.strangelove]

ERISA has very limited recoveries for an MCO plaintiff. Probably because Senator Javits never intended his law to apply to HMOs. It was designed to prevent abuse of benefits, pension and retirement funds managed by Third Parties. However, since HMOs are often an employment benefit, they often get ERISA protection.

HMOs want ERISA protection because monetary awards for the victorious plaintiff are nominal, just fees in excess of teh cost of service denied.

However, even if the case goes to state court, the state court still must apply the federal law. The question of jurisdiction does not alter the federal preemption of ERISA.

This is why we must support Sen. Kennedy and his patient bill of rights.