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The Supreme Court's View of the Managed Care Industry's Liability for Adverse Patient Outcomes

Peter D. Jacobson, JD, MPH
JAMA. 2000;284(12):1516. doi:10.1001/jama.284.12.1512.
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To the Editor: In a recent article in THE JOURNAL,1 Mr Pomfret and I described the structure of the Federal Employee Retirement Income Security Act (ERISA) and how ERISA litigation reduces physician autonomy. In a subsequent development, the Supreme Court recently decided Pegram v Herdrich, 530 US_ (2000), a case that further addresses these issues.

Herdrich argued that she was not provided with an ultrasound diagnosis in a timely manner because her managed care plan's financial incentives encouraged her physician to delay the procedure. During the delay, her appendix ruptured, causing peritonitis. After being awarded $35,000 in state court, she sued under ERISA, arguing that the plan's financial incentives breached a fiduciary duty to act in the patient's best interests.


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