HEALTH LAW AND ETHICS ERISA Litigation and Physician Autonomy

THE FEDERAL EMPLOYEE RETIREMENT INCOME SECUrity Act (ERISA) looms like a colossus over the managed care environment. Originally enacted to regulate employer-sponsored pension plans, the statute also covers health care benefits established by self-insured employers (with few exceptions, such as for governmental employees). According to recent Department of Labor estimates, ERISA applies to approximately 125 million US citizens. ERISA has created a regulatory vacuum by preempting state regulation of managed care organizations (MCOs) and drastically limiting state medical liability lawsuits against MCOs, while providing minimal federal regulation in their place. For physicians, ERISA preemption has indirectly caused courts to favor MCOs’ cost containment initiatives over traditional notions of physician autonomy. The treatment a physician recommends is vulnerable to a managed care utilization management process largely unconstrained by state regulation or liability law, inevitably resulting in reduced physician autonomy. The consequences of ERISA preemption lie at the heart of proposed congressional patients’ rights legislation that would restore the primacy of the patient-physician relationship and permit state legal challenges to cost containment programs. At issue is control over physicians’ clinical decisions and the ability to challenge improperly operated cost containment programs. Because ERISA plays a vital role in the relationship between physicians and MCOs, it is important for physicians to understand what ERISA is, how it operates, and how it influences clinical decision making and physician autonomy in the managed care era. In this article, we outline ERISA’s major provisions, analyze trends in ERISA litigation applicable to physicians, and conclude by discussing the policy implications and significance of these trends for physician autonomy.