Health Care Consumers Benefit from Supreme Court’s Recent Decisions

By Melanie R. Margolis

The United States Supreme Court decided a number of health-related cases during its October 2002 Term. The Court considered cases that involved access to providers, access to medication, as well as involuntary medication, false claims, and a variety of other issues. In the end, how did health care consumers and providers fare this term? Overall, the Term was beneficial to the health care consumer, but less so for providers.

In Kentucky Association of Health Plans v. Miller, 123 S. Ct. 1471 (2003), the Court determined that health care providers who fulfill and accept a health plan’s relevant requirements in states with any willing provider laws will not be excluded from health maintenance organization provider networks. This decision may result in an increase in patient choice of providers, as well as an increase in quality of care.

In Pharmaceutical Research and Manufacturers of America v. Walsh, 123 S. Ct. 1855 (2003), the Court looked at whether a state, in this case Maine, could compel drug manufacturers to subsidize prescription drug price discounts for Medicaid and non-Medicaid patients. The Supreme Court upheld the Maine program. As a result, future prescription drug prices should be reduced through programs in other states modeled after the Maine program.

This term, the Court considered a case involving private actions brought under the Family and Medical Leave Act (FMLA). In Nevada Dept. of Human Resources v. Hibbs, 123 S. Ct. 1972 (2003), the Court held that state employees may recover money damages in federal court in the event of a state’s failure to comply with the FMLA family-care provision.

In Cook County v. United States ex rel. Chandler, 123 S. Ct. 1239 (2003), the Court considered the question of whether local governmental entities are subject to qui tam actions under the False Claims Act (FCA). The Court held that they are subject to such suits, making them vulnerable to serious financial consequences.

In Black & Decker Disability Plan v. Nord, 123 S. Ct. 1965 (2003), the Court held that the “treating physician rule” is not applicable to private benefit plans, rejecting the notion that private benefit plan administrators must defer to treating physician’s opinions in deciding whether an individual is entitled to disability benefits.  The “treating physician rule” calls for more weight to be given to a treating physician’s opinion, which makes sense, given that the treating physician would know the patient better than a private benefit plan administrator. The treating physician’s opinion is now essentially disposable in deciding whether an individual is entitled to disability benefits, and the patient’s relationship with the treating physician is rendered inconsequential. See Scott, "Supreme Court Rejects 'Treating Physician Rule' for ERISA Determinations" at MedicalProfessionals/030710Supreme.html.

All things considered, this Supreme Court Term was favorable to the health care consumer. Kentucky Association of Health Plans and Pharmaceutical Research and Manufacturers of America may result in more choice in providers for those enrolled in health plans, an increase in the quality of care, and possibly more affordable prescription drugs for the poor. The Hibbs decision may result in more employees taking advantage of the FMLA, perhaps improving their and their families health and well-being.

On the other hand, Cook County made it a harsh term for local government health care providers. Perhaps, as a result, a decrease in fraud and abuse will be seen, but ultimately, this case will likely have an adverse impact on health care consumers. As similar suits make their way through the courts, public hospitals will likely have to pay some significant damages. As a result, some such hospitals may not be around in the future. A decrease in the number of public hospitals providing indigent care and participating in Medicare and Medicaid will likely mean decreased accessibility to health care for the indigent.

07/18/03