Helling v. Carey Revisited: Physician Liability in the Age of Managed Care

• Jurisdiction: United States,Federal
• Citation: Vol. 25 No. 03
• Publication year: 2002

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 25, No. 4SPRING 2002

Helling v. Carey Revisited: Physician Liability in the Age of Managed Care

Leonard J. Nelson III(fn*)

In 1974, the Supreme Court of Washington decided Helling v. Carey,(fn1) perhaps the "most infamous of all medical malpractice cases."(fn2) In Helling, the court ignored expert testimony at trial as to medical custom and held two ophthalmologists liable as a matter of law for failing to administer a routine pressure test (tonometry test) to detect glaucoma.(fn3) The Helling court did its own analysis of the purported custom of not routinely testing for glaucoma in persons less than forty and found it lacking. Instead, it determined it was cost effective to use the test routinely in these age groups.(fn4)

Helling is a notorious decision because it rejects the traditional professional standard of care.(fn5) Most courts in medical malpractice cases focus on whether the physician treated the patient in accordance with the prevailing medical custom.(fn6) The physician who complies with custom is not deemed negligent even though the custom itself could be deemed inadequate to protect the patient.(fn7) Typically, in malpractice cases, unlike other tort cases, the trier of fact is not asked to weigh the risks and utilities of the physician's conduct.(fn8) Instead, the Helling court focused on the cost effectiveness of the treatment that the treating physician withheld.(fn9) Although there are a few other cases explicitly rejecting the customary standard,(fn10) Helling has not been followed by courts in other states insofar as it imposes liability as a matter of law on physicians for withholding medical treatment based on an appellate court's cost benefit analysis.(fn11) Even in Washington State its influence has waned.(fn12)

The opinion of the court in Helling, authored by Justice Hunter, articulated the applicable standard of care as that of a "reasonable, prudent physician."(fn13) In a recent article, Professor Peters argues that there is currently a trend in the courts toward adoption of the reasonable, prudent physician standard.(fn14) In fact, as Professor Dobbs notes: "[C]ourts seem increasingly to blend the language of reasonable person with the language of professional standards in an uncertain mixture with uncertain effects."(fn15) Moreover, it does not appear, that this trend toward the adoption of a reasonable, prudent physician standard has resulted in a change in the way that most malpractice cases are tried.(fn16) Although courts may articulate the standard in terms of the reasonable, prudent physician, they still generally require the plaintiff to present expert testimony as to the prevailing professional standard and the defendant's breach of that standard.(fn17)

The outcome in Helling has been widely criticized. In an influential article, Professors Fortess and Kapp pointed out the shortcomings of the Helling court's cost/benefit analysis in light of the high rate of false positives on the tonometry test.(fn18) Certainly, one lesson that we may glean from Helling is that it is not wise for a court to perform its own cost/benefit analysis without the aid of expert testimony.

On the other hand, an empirical study by Professor Wiley of the impact of the Helling decision also casts doubt on the veracity of the expert testimony in that case as to the prevailing custom and suggests that courts should be somewhat skeptical of customary standards.(fn19) In his study, Professor Wiley determined that "Washington ophthalmologists did test patients less than forty with some regularity even before Helling."(fn20) In light of Wiley's study, the Helling court was justified in disregarding the custom evidence in the case and focusing on the cost-effectiveness of the treatment that was withheld even if its cost effectiveness analysis was faulty. Indeed, with some modification the court's approach in Helling with its focus on cost effectiveness could point the way to a more realistic approach in malpractice cases particularly in light of the changing role of the physician in the managed care era.

As a result of threats of greater exposure to lawsuits, as well as market pressures, health plans are dropping treatment pre-authorization requirements and forcing treating physicians to focus on the cost effectiveness of medical treatments. There is widespread dissatisfaction with the intrusion of managed care bureaucrats into the physician/patient relationship.(fn21) This has resulted in calls for Congress to remove the bar posed by the Employee Retirement Income Security Act of 1974 (ERISA) and authorize lawsuits under state tort law against health plans for denials of benefits.(fn22) At this writing, the bar to these suits has not been removed.

As a reaction to the prospect of greater liability exposure for denials of benefits and market forces, however, health plans have already been reducing their reliance on required pre-authorizations of treatments and shifting responsibility for cost containment to their physicians. In the fall of 1999, United Health Care, one of the largest managed care plans in the United States, announced that it would no longer require physicians to obtain pretreatment authorizations.(fn23) Thereafter, a number of other plans announced similar changes in policy. U.S. Healthcare, a subsidiary of Aetna, hired a new C.E.O., who vowed to reduce the number of procedures requiring precertification.(fn24) As a result, several of the nation's largest health insurers no longer require prior authorizations for diagnostic tests or treatments, hospital admissions, or referrals by gatekeeper physicians to specialists.

Health plans have touted their elimination of pre-authorization requirements as a cost saving measure and an appropriate response to changes in consumer attitudes. In announcing its decision, United Health Care noted that it was approving virtually all requests anyway so dropping the requirement would actually save money.(fn25) This change in policy may have been in part an attempt to revitalize managed care stocks that had become depressed as a result of investor concerns about the backlash against managed care.(fn26) It was also an attempt to reduce exposure to lawsuits in the future based on denial of benefits by health plans.(fn27)

Under ERISA, patients cannot sue their health plans for denials of benefits under state tort law.(fn28) Courts now seem to distinguish between "eligibility decisions" and "treatment decisions."(fn29) Claims based on the former are preempted while the latter are not. If a claim is completely preempted, then it may be removed to federal court and the plaintiff is consigned to the limited remedies available under ERISA.(fn30) When a claim against a health plan is preempted by ERISA, a plan beneficiary may not recover compensatory and punitive damages for personal injuries in an action against the plan.(fn31)

ERISA does not preempt claims against a health plan alleging negligent adoption and implementation of utilization policies or negligent selection, supervision, and retention of a physician.(fn32) On the other hand, a claim against a health plan alleging that it negligently delayed in providing the patient with a referral outside its physician network is completely preempted.(fn33) The impact of ERISA preemption on claims against physicians is not clearly defined at this time. With the shift of responsibility for cost containment to physicians, it is likely that physicians will frequently be making "mixed eligibility and treatment decisions."(fn34) In some instances, physicians may successfully argue that ERISA preempts claims against a physician who makes primarily eligibility decisions.(fn35)

Congress has reacted to the public's concerns about managed care by attempting to remove the ERISA bar to state tort lawsuits.(fn36) This legislative action has been fueled by the outcry of consumer groups who have expressed outrage over denials of benefits by anonymous managed care plan bureaucrats. Physicians have also complained about health plan red tape and infringements on their ability to provide appropriate care to their patients.(fn37) Naturally, these developments have encouraged health plans to shift responsibility for denials of care to the treating physicians. Professor Clark Havighurst notes that "cost control is often achieved through sub rosa, or secret, rationing by clinicians whose choices are influenced by financial in-centives to economize."(fn38)

Where it is the physician rather than a plan administrator that decides not to use a particular diagnostic test or treatment, the plan may be able to point to the physician as the responsible decision maker. Moreover, dropping prior authorization requirements and instead employing financial incentives like capitation to encourage health plan physicians to economize deflects criticism from the plan to the physician. This could in turn reduce public scrutiny of the role of health plan bureaucrats in implementing cost containment policies. In fact, it seems that health plans have already revamped themselves in response to proposed legislative reforms.(fn39)

The failure of a health plan to provide treatment recommended by a patient's physician obviously places in high relief the role of the plan bureaucrats. On the other hand, leaving such rationing decisions to treating physicians is a...