A recent transplant case raises an interesting question: Should a managed care organization (“MCO”) face criminal prosecution when a patient dies after the MCO’s decision to deny payment for treatment? Is providing such a legal cause of action the solution, or does doing so just put money into the pockets of attorneys rather than into the hands of the injured health care consumer? As a recent case suggests, bad publicity could be as effective a deterrent as any criminal prosecution in changing an MCO’s behavior.
The public outcry from this case and the public bias against “greedy” insurers may be what is prompting the criminal liability threat. Managed care has become the new lead paint, tobacco, and gun manufacturer–it is a completely legal industry that is increasingly unpopular with the public. Unlike those industries, however, civil suits against MCOs face an additional hurdle: ERISA preemption. As a consequence, a plaintiff’s damages have been limited to reimbursement for expenses, which has been unsatisfactory for many, especially those who have lost loved ones due to treatment denial. Though criminal sanctions would not solve the remedies issue, it could provide the punitive and deterrent aspects for which there seems to have been so much public outcry.
This Note explores the logic behind healthcare insurers’ seemingly criminal exempt status, including situations when treatment delay and denial is almost certain to result in death for the insured, and why criminal prosecution is not the answer to the current healthcare debate. The events surrounding Nataline Sarkisyan’s death are outlined above for purposes of showing the sensitive nature of such cases and the strong public reaction against the insurer. This paper does not purport to determine whether criminal charges would be warranted in CIGNA’s case since many of the facts are in dispute. Part I will explore why a move toward criminal prosecutions seems almost inevitable in light of ERISA’s limitations on damages and the public
response to the healthcare crisis. Part II will look at why criminal homicide charges against a healthcare insurer seem unlikely to succeed, and Part III will examine why such prosecutions are not the solution to the current healthcare debate. Finally, Part IV will postulate why and how Congress should step in to fill ERISA’s gaping holes.