Employer sponsored health benefit plans under ERISA after Pegram v. Herdrich: the fiduciary duty argument and mixed eligibility versus treatment decisions.

Dividing loyalties: caring for individuals and populations.

Are health maintenance organization (HMO) physicians obligated to act exclusively in the interest of the individual patient? Does the mere existence of financial incentives to limit patient care violate this obligation? To what extent are doctors responsible for the population of patients served by a health plan, or for promoting a fair distribution of health care among society as a whole? Thes...

Pegram's significance for managed health care.

On June 12, 2000, in a unanimous opinion written by Justice Souter, the U.S. Supreme Court, reversing a decision of the U.S. Court of Appeals for the Seventh Circuit, held in Pegram v. Herdrich that “mixed eligibility” decisions made by HMO physicians are not fiduciary decisions under ERISA. In so ruling, the Court upheld the concept that the reasonable sharing of financial risk with HMO networ...

Pegram v Herdrich: Implications for Consumer Protections in Managed Care

This Report, prepared for the Substance Abuse and Mental Health Services Administration, provides a brief overview of the United States Supreme Court’s landmark decision in Pegram v Herdrich (hereinafter referred to as Herdrich). This report begins with a brief overview of the debate in the courts over how to distinguish between legal challenges to the conduct of managed care companies in which...

The Supreme Court's limitation of managed-care liability.

This article summarizes and critiques the U.S. Supreme Court's decision in Aetna Health Inc. v. Davila, which limited managed care organizations' liability for negligent decisions about the care of patients in private employer-sponsored health plans governed by ERISA. It contrasts the Court's dichotomous view of health benefit plans, in which insurers administer contracts and treating physician...

Pegram v. Herdrich: a victory for HMOs or the beginning of the end for ERISA preemption?