HMO Found Responsible in Man’s Death

A Los Angeles County jury decided Thursday that Aetna U.S. Healthcare of California unreasonably withheld promised benefits from an HMO member and is legally responsible for the 79-year-old man’s death on New Year’s Day 2000.

But in a victory for Aetna, the Superior Court jury ruled that the health insurer had not acted with malice, fraud or oppression. That means that the survivors of Murray Rosenberg cannot receive punitive damages. The insurance company was ordered to pay $426,000 for economic damages and pain and suffering, an award that was made irrelevant by a secret settlement.

The lawsuit was watched by the industry and consumer groups because it challenged the HMOs’ contention that they should not be liable for mistakes made by doctors, hospitals and nursing homes in their contracted networks. Aetna does not provide direct care.

Health care experts said that large punitive awards often spook investors and lead them to question their faith in the HMO industry.

In 1999, the Rosenberg family’s lawyer, Michael Bidart, made national news when he won $120.5 million in a separate lawsuit against Aetna. Then, he represented a widow who claimed that Aetna had unfairly denied her husband treatment before he died of cancer. The San Bernardino case was settled for an undisclosed amount.

The $426,000 award in the Rosenberg case is unlikely to rattle the industry. And it was rendered moot because both sides settled the case amicably before the jury finished deliberating and both refused to disclose details. Lawyers said they still wanted to hear the jury’s decision after the seven-week trial to gauge whether their arguments had resonated with jurors.

“Aetna is obviously sympathetic to the Rosenbergs for their loss, but we are very, very pleased that the jury rejected almost unanimously that Aetna did something wrong and should be punished,” said Aetna’s outside counsel, John Swenson.

The insurer’s legal team maintained that it had never denied any test, referral or treatment for Rosenberg, who suffered from multiple myeloma, or cancer of the bone marrow.

Bidart argued that Rosenberg was discharged from a West Covina hospital too soon after his chemotherapy treatments ended in December 1999, and that his primary care physician wasn’t even told where he was sent. The family’s lawyer also claimed that the man had not received adequate care at the Covina nursing home where he was sent after his discharge.

Rosenberg returned to the hospital and died there on Jan. 1, 2000.

Bidart alleged that Aetna acted in bad faith because it failed to ensure proper coordination of Rosenberg’s care by the medical providers. The jury concluded that Aetna’s “unreasonable failure” to provide promised benefits was a “substantial factor” in Rosenberg’s death.

The verdict “has the possibility of benefiting a lot of senior citizens in the future” by pushing HMOs to act more responsibly, Bidart said. He acknowledged that punitive damages would have made a stronger statement.

The nursing home operator, Sun Healthcare Group, also was sued but settled its part of the case for $250,000 before the start of the Aetna trial; it did not acknowledge wrongdoing.

After announcing their verdict Thursday, several jurors said that Aetna should have more carefully monitored the actions of its medical providers, particularly the nursing home. “If I’m the contractor, I need to make sure that you do your job,” said juror Esperanza Bango.

Juror Autry Walters said Aetna failed to provide the benefits that it had promised Rosenberg, and as a result, he received disjointed care. “They just dropped the ball,” Walters said.

Spokesman David Carter said Aetna was disappointed that the jury had awarded any damages. “Aetna fulfilled the promise that it made to Mr. Rosenberg and his family to provide access to care,” he said.

Rosenberg was covered through the federal Medicare program for the elderly. About 5 million people are enrolled in Medicare HMOs, which offer fewer choices for care but additional benefits, such as prescription drug coverage.