Supreme Court Won’t Allow State Suit in Death Case : Litigation: U.S. court’s action underscores the limiting of choices available to patients unhappy with insurers or their care.

In a case that underscores the shrinking options available to patients with complaints about their medical care, the U.S. Supreme Court on Monday refused to allow a California woman to sue her HMO in state court over allegations that it contributed to her son’s 1991 death by denying experimental treatment for his cancer.

The court declined without comment to overturn federal district court and court of appeals rulings against the mother, Billie J. Comer of Pleasanton.

The Northern California woman had sought to sue in state court in order to pursue a much broader range of claims than is possible under federal law. Among other things, federal law does not allow punitive damages, recovery for pain and suffering or claims for wrongful death--the basis of Comer’s lawsuit against Kaiser Foundation Health Plan, her health maintenance organization.

At issue was Comer’s contention that Kaiser should have paid for her son to undergo an autologous bone marrow transplant--a costly, unusual treatment--to treat rhabdomyosarcoma, a rare pediatric cancer that attacks the muscles. Kaiser refused on grounds that its contract with Comer’s then-employer, AT&T; Networks, did not cover such “experimental” therapies.

Comer raised the more than $100,000 needed for the transplant privately. But by the time the procedure was started, the cancer suffered by Ryan, a 17-year-old star high school athlete, had advanced too far for the therapy to be completed.

“This sets medicine back,” she said in an interview Monday. “It means they can pick and choose what they pay for. They can pick and choose what children they want to save.”

Her attempt to sue Kaiser in state court was then stymied by the Employee Retirement Income Security Act (ERISA), a federal law that sets broad standards for employee pension and insurance plans.

The law says that most disputes over such coverage must be heard in federal court. It exempts only a few workers--namely, those who buy their health insurance privately and those employed by government agencies, schools and religious institutions.

Under ERISA, plaintiffs can only seek federal court judgments forcing the insurer to pay for the disputed coverage, and for attorney fees and court costs. Attorneys for insurers say that provides patients with plenty of leverage.

But plaintiffs’ attorneys say that by barring punitive and other damages, ERISA removes a potent financial weapon patients could use to ensure that their HMOs or other health insurers do not deny them care arbitrarily.

Under federal law, for example, Comer’s potential recovery from Kaiser for her son’s death would be virtually nil, even if she could prove that Kaiser improperly rejected his transplant. The reason: She had no expenses to be reimbursed.

In a similar 1993 case heard in state court in California, however, Health Net, a California managed-care company, lost an $89.3-million judgment--including more than $70 million in punitive damages--for having denied the same kind of transplant to Nellie Fox, an Oxnard housewife who died of the breast cancer for which she sought the treatment. Fox’s family was able to sue in state court because her husband’s employer, which provided the health coverage, was a public school district.

The threat of such huge judgments has become a more important lever, say plaintiffs’ attorneys, because the national craze for medical cost-cutting has led to an explosion of disputes over whether certain procedures are being vetoed by insurers simply because of their cost.

“There is no recourse, none at all,” said Gary L. Tysch, Comer’s attorney in Upland. “You end up with a situation where HMOs are being given a license to kill with impunity because the patient can’t bring an action in state civil court.”

Insurers and HMOs argue that ERISA leaves patients with considerable power to force them to make medical judgments responsibly.

“To say the [health] plans have an incentive to sell people short doesn’t hold up,” said Kennedy P. Richardson, the attorney for Kaiser in the Comer case. The potential to recover attorney fees and court costs should be adequate incentive to bring cases, he added.